Header Image

What Are My Loan Options?

Fixed-rate mortgages

With a fixed-rate mortgage, your interest rate – and your monthly payment of principal and interest – will stay the same for the entire term of the loan. This type of mortgage tends to be the most popular because it protects homeowners from the possibility of future monthly payment increases (a situation faced by borrowers who select an adjustable-rate mortgage) and is very straightforward.

Fixed-period Adjustable-Rate Mortgage (ARM) or hybrid ARM

Most lenders today offer a fixed-period or "hybrid” ARM, which is an adjustable-rate mortgage featuring an initial fixed interest rate period, typically of 3, 5, 7, or 10 years. After the fixed-rate period expires, the interest rate becomes adjustable for the remainder of the loan term. Fixed-period ARMs are often named by the length of time the interest rate remains fixed.

Example: In a 5/1 ARM, the “5” stands for the five-year introductory period during which the interest rate remains fixed. The “1” indicates that the interest rate is subject to adjustment once per year after the introductory period, and for the remainder of the loan term.

Government loans (FHA and VA)

If you're qualified, you may consider an FHA (Federal Housing Administration) or a VA (Department of Veterans Affairs) loan. These programs allow a lower down payment and credit score when compared to conventional loans.

FHA loans

FHA loans are helpful for applicants who don't have a 20% down payment saved or who need more flexible income or credit requirements.

There are some differences between FHA loans and conventional loans. For example, there's a maximum loan amount, which varies depending on where the home is located.

Also, FHA loan programs typically require you to pay mortgage insurance, similar to private mortgage insurance, or PMI. Under FHA, this is called a “mortgage insurance premium,” or MIP. Typically, you will pay an upfront mortgage insurance premium (UFMIP). Keep in mind that the UFMIP must be entirely financed into the mortgage or paid in cash; it cannot be partially financed. You will also pay an annual insurance premium, which you will pay monthly with your mortgage payment. You’ll need to factor that amount in when you set your budget.

VA loans

VA loans are offered by VA-approved lenders and are insured by the Department of Veterans Affairs. To qualify, you must be a current or former member of the U.S. armed forces or the current or surviving spouse of one. These loans can help reduce your down payment requirement, sometimes to zero. They may also help you get a lower interest rate on your loan. However, there are limits on the available loan amount. If you believe you may qualify for a VA loan, be sure to tell your lender, so you can explore your options together.

Jumbo loans

When you start to explore your mortgage options, you may hear the term "jumbo loan" come up. If you do, this may be because you live in a high-priced real estate market or are looking at properties that are more expensive than average. If you are considering homes requiring a mortgage that exceeds $417,000, it's a good idea to find out more about jumbo loans and discuss them with your lender.

GET IN TOUCH

Community Updates

The Coffee Shop

This quaint coffee shop in downtown Milford, IA is the talk of the town. You must stop in for a hot or cold drink and enjoy the atmosphere of this eclectic cafe. Locals and visitors alike enjoy meeting at this town favorite.

Haywards Bay

Haywards Bay in West Lake Okoboji

Haywards Bay on West Lake Okoboji boasts low approaches and one of the few areas on West Lake to offer sand beaches. Renowned for the "bay of the flags", you will know you are in Haywards bay because of the all the American flags on the end of the docks. Fishing is great in Haywards Bay and the sunsets are one in a million. To get to Haywards Bay by car, one would drive the east side of the lake on Lakeshore Dr.

Pike's Point State Park

Pike's Point State Park in West Lake Okoboji

Pike's Point is located at 15973 213th Ave, Spirit Lake, IA on beautiful West Lake Okoboji. It is one of the largest parks in the Iowa Great Lakes, and provides for all kinds of activities including fishing, swimming, bird watching etc. This park also has a rest room, and a beach. If coming by boat, one wants to be careful as the point extends far into the lake, and there is a warning buoy roughly 300 feet from the point of shore. In 2010, many trees here were uprooted because of some severe straight line winds during the storm that reaked havoc through the Iowa Great Lakes.

Subscribe To Our Newsletter

The newsletter is sent periodically and will update you on the latest real estate news and offers.