NBI Mortgage LLC - Shelby, NC - Home Mortgage

NBI Mortgage LLC

NBI Mortgage LLC
111 North Lafayette Street
SHELBY, NC 28150
(704)482-4957

With so many financing choices available today, it's easier than ever to find a home loan that meets both your budget and future plans. But before you sign on the dotted line, it pays to be familiar with some of the most common types of loans. You should also get advice from your real estate agent and speak with several lenders about your options.

Fixed-rate Mortgages:

Fixed-rate mortgages carry the same interest rate for the life of the loan. These types of loans have traditionally been the most popular choice for homeowners because their steady payments are easy to budget for, and can help protect against inflation. Fixed-rate mortgages are most common in 30-year and 15-year terms, but may also be available for 20-year and 40-year mortgages.

Adjustable-Rate Mortgages:

Adjustable-rate mortgages (or ARMs) are the most widely accepted alternative to fixed-rate mortgages. The primary difference is that the interest rate and monthly payment can change over the life of the loan. This is because the interest rate for an ARM is tied to an index (such as Treasury Securities) that may rise or fall over time. To protect homebuyers from dramatic rate increases, most ARM loans have "caps" that limit the rate from rising above a certain amount between adjustments (e.g. no more than 2 percent a year), as well as a "ceiling" on increases over the life of the loan (e.g. no more than 6 percent).

Hybrid Loans:

Hybrid loans get their name because they combine features of both fixed-rate and adjustable-rate mortgages. For example, a typical hybrid loan may start with a fixed-rate loan for several years, and later convert to an adjustable-rate mortgage. (Some hybrid loans do not have interest rate caps for the first adjustment period, so be sure to check with the lender). Another type of hybrid loan may start with a low introductory fixed interest rate, and then change to another (usually higher) fixed interest rate for the remainder of the loan term.

Using Time Wisely:

The length of time you plan to live in a house should be an important factor in your choice of financing. If you plan to stay for 10 years or longer, a traditional fixed-rate mortgage may be your best bet. But if you plan on owning a home for less than 5 years, then the low introductory rate of an adjustable-rate mortgage or hybrid loan might make the most financial sense. In general, ARMs have the lowest introductory interest rates, followed by hybrid loans, and then traditional fixed-rate mortgages.

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