Types of Mortgages
Find the types of mortgage loans that fit your lifestyle
Whether you’re buying your first house or your fifth, there are many different types of mortgages to choose from. When it comes to financing your new home, it’s important to understand the differences between each type of mortgage so that you can choose the right offering for your budget, but also feel confident in your decision.
Nationwide Bank® offers several types of mortgage loans to fit your needs, whatever they may be, and help you pay less on what you borrow. We also offer a Best Price Guarantee that guarantees you a great rate on the mortgage product you select or else we’ll pay you $300. This is just another way that we’re On Your Side®.
Considered a traditional type of mortgage, a fixed mortgage offers borrowers a fixed interest rate over the term of the loan, whether it is 10, 15, 20 or 30 years, with monthly payments that remain the same. In the beginning of the loan period, the majority of monthly payments will serve the purpose of paying off the loan’s interest. During the latter part, you will be paying more toward the loan’s principal.
Why a fixed mortgage may be right for you:
- You are planning to stay in the house for several years
- You want the security of knowing your interest rate will not change
- You like having a predictable monthly payment so you can better budget for other expenses
Why a fixed mortgage may not be the right choice:
- You are locked into the same interest rate for the term of your loan and cannot take advantage of lower rates unless you refinance, in which case you could have to pay additional closing costs, appraisal and title fees
- Interest rates are usually higher for this type of mortgage
To get a better understanding of whether this type of mortgage may be the best option for your financial situation, learn more about fixed mortgages.
An adjustable rate mortgage (ARM) is a type of mortgage with set adjustment periods in which the interest rate may increase or decrease, depending on current market conditions. Rate caps are put in place so that the interest rate can never increase or decrease by more than the determined percentage over a predisclosed period of time.
Why an adjustable rate mortgage may be right for you:
- You expect to live in a home for a short time period, respective to the term of your ARM
- Interest rates are usually lower than other types of mortgages for the first few months to first few years, depending on the terms
Why an adjustable rate mortgage may not be the right choice:
- Your payments may increase once the loan’s introductory period ends
- Monthly payments will be harder to predict, making it more difficult to budget for other expenses
To learn whether this type of mortgage may be the best option for your borrowing needs, learn more about adjustable rate mortgages.
A jumbo mortgage may become an option when you’re purchasing a larger, more expensive home. The loan amounts eligible for this type of mortgage are determined by government-sponsored agencies Fannie Mae and Freddie Mac and change yearly. These types of mortgages also typically have a higher interest rate due to the higher loan amount.
Why a jumbo mortgage may be right for you:
- You are purchasing a higher-priced home
Why a jumbo mortgage may not be the right choice:
- The interest rates are higher than other types of mortgage offerings, which will increase your monthly payments
To get a better understanding of whether this type of mortgage may be the right option for your borrowing situation, learn more about a jumbo mortgage loan.
Confident in the type of mortgage that’s best for you? Begin your mortgage loan application online today!
Other home loan options and information
- Did you know you can use your home’s equity to finance expenses such as home renovations, college tuition and medical bills? Learn more about home equity loans and home equity lines of credit today.
- Are the latest mortgage interest rates lower than the one on your current loan? Find out how mortgage refinancing may be able to reduce your monthly loan payments.
- Just getting started and need additional mortgage information? Check out our FAQ on how to go about getting the right mortgage loan.
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