[caption id="attachment_42" align="aligncenter" width="600"]Spring and warmer weather are on their way again soon, meaning the prime time for buying and selling homes is as well. Purchasing a new home is no small decision. It is something that requires a lot of time planning and ensuring your finances are in order. It also requires that you get the right mortgage in place. Having the right mortgage for your needs is essential, as the wrong mortgage type can lead to spending hundreds or thousands more over the life of the loan than you need to. With so many mortgage options available – adjustable rate, fixed rate, balloon and bridge to name a few – how do you know which is best for you? The mortgage guide below will help you learn more about each loan type, including drawbacks and benefits. Once you’ve read through it, be sure to get in touch with the mortgage lenders at Peoples Bank & Trust to start a conversation about your home loan needs. Mortgage Guide Adjustable-Rate Mortgages, also known as an ARMs. •Interest rate: varies based on market conditions. ARMs come with change caps and lifetime rate caps to prevent huge jumps in mortgage payments. • Ideal for: those who are only going to be in a home for a few years. • Benefits: allows you to take advantage of periods of low interest rates. • Drawbacks: mortgage and interest payment can change each month, making it hard to budget for. Fixed-Rate Mortgages • Interest rate: locked in for the life of the loans. • Ideal for: those who will be living in their homes for a long period of time. • Benefits: simple to understand, and the fixed monthly payments are easy to budget for. • Drawbacks: may be too expensive if you purchase your home in a time of high interest rates. Balloon Mortgages • Interest rate: fixed for the life of the loan • Ideal for: someone expecting a large injection of cash or capital soon or those who will be moving out of the home soon. • Benefits: short-term, allow you to get large amounts of financing for lower interest rates • Drawbacks: the full balance of the mortgage is due at the end of the term. Bridge Loans • Interest rate: fixed for the life of the loan. • Ideal for: anyone wanting to purchase a new home before they sell their current home. • Benefits: gives you the short-term financing you need to purchase a new home before selling you current home. • Drawbacks: payments may be larger as the full balance of the loan must be paid by the time permanent financing is secured. If you have any further questions about your mortgage options, be sure to contact a mortgage lender at Peoples Bank & Trust. They take the time to listen to your needs to offer the best mortgage solution possible. We hope to hear from you soon! Peoples Bank & Trust Co. Member FDIC Equal Housing Lender NMLS #407724 There are different types of mortgages to choose from, a choice that can cost or save you thousands of dollars.[/caption] Spring and warmer weather are on their way again soon, meaning the prime time for buying and selling homes is as well. Purchasing a new home is no small decision. It is something that requires a lot of time planning and ensuring your finances are in order. It also requires that you get the right mortgage in place. Having the right mortgage for your needs is essential, as the wrong mortgage type can lead to spending hundreds or thousands more over the life of the loan than you need to. With so many mortgage options available – adjustable rate, fixed rate, balloon and bridge to name a few – how do you know which is best for you? The mortgage guide below will help you learn more about each loan type, including drawbacks and benefits. Once you’ve read through it, be sure to get in touch with the mortgage lenders at Peoples Bank & Trust to start a conversation about your home loan needs.

Mortgage Guide

Adjustable-Rate Mortgages, also known as an ARMs.

  • Interest rate: varies based on market conditions. ARMs come with change caps and lifetime rate caps to prevent huge jumps in mortgage payments.
  • Ideal for: those who are only going to be in a home for a few years.
  • Benefits: allows you to take advantage of periods of low interest rates.
  • Drawbacks: mortgage and interest payment can change each month, making it hard to budget for.

Fixed-Rate Mortgages

  • Interest rate: locked in for the life of the loans.
  • Ideal for: those who will be living in their homes for a long period of time.
  • Benefits: simple to understand, and the fixed monthly payments are easy to budget for.
  • Drawbacks: may be too expensive if you purchase your home in a time of high interest rates.

Balloon Mortgages

  • Interest rate: fixed for the life of the loan
  • Ideal for: someone expecting a large injection of cash or capital soon or those who will be moving out of the home soon.
  • Benefits: short-term, allow you to get large amounts of financing for lower interest rates
  • Drawbacks: the full balance of the mortgage is due at the end of the term.

 Bridge Loans

  • Interest rate: fixed for the life of the loan.
  • Ideal for: anyone wanting to purchase a new home before they sell their current home.
  • Benefits: gives you the short-term financing you need to purchase a new home before selling you current home.
  • Drawbacks: payments may be larger as the full balance of the loan must be paid by the time permanent financing is secured.
If you have any further questions about your mortgage options, be sure to contact a mortgage lender at Peoples Bank & Trust. They take the time to listen to your needs to offer the best mortgage solution possible. We hope to hear from you soon!   Peoples Bank & Trust Co. Member FDIC Equal Housing Lender NMLS #407724