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Types of Loans

Thirty-Year Fixed Rate Mortgage
The traditional 30-year fixed-rate mortgage has a constant interest rate and monthly payments that never change. This may be a good choice if you plan to stay in your home for seven years or longer. If you plan to move within seven years, then adjustable-rate loans are usually cheaper. As a rule of thumb, it may be harder to qualify for fixed-rate loans than for adjustable rate loans. When interest rates are low, fixed-rate loans are generally not that much more expensive than adjustable-rate mortgages and may be a better deal in the long run, because you can lock in the rate for the life of your loan.

Fifteen-Year Fixed Rate Mortgage
This loan is fully amortized over a 15-year period and features constant monthly payments. It offers all the advantages of the 30-year loan, plus a lower interest rate—and you'll own your home twice as fast. The disadvantage is that, with a 15-year loan, you commit to a higher monthly payment. Many borrowers opt for a 30-year fixed-rate loan and voluntarily make larger payments that will pay off their loan in 15 years. This approach is often safer than committing to a higher monthly payment, since the difference in interest rates isn't that great.

Adjustable Rate (ARM)
These loans generally begin with a lower interest rate compared to a fixed rate mortgage. However, the interest rate is only fixed for a short period of time and then changes at specified intervals depending on changing market conditions, thereby increasing or decreasing your monthly mortgage payment.  A few options are available to fit your individual needs and your risk tolerance with the various market instruments.

ARMs with different indexes are available for both purchases and refinances. Choosing an ARM with an index that reacts quickly lets you take full advantage of falling interest rates. An index that lags behind the market lets you take advantage of lower rates after market rates have started to adjust upward. The two most commonly used indexes are the 1 Year U.S. Treasury Index and the 1 Year LIBOR (London Interbank Offered Rate) Index. The interest rate and monthly payment can change based on adjustments to the index rate.

Hybrid ARM (5/1 ARM, 7/1 ARM, 10/1 ARM)
These increasingly popular ARMS—also called 3/1, 5/1 or 7/1—can offer the best of both worlds: lower interest rates (like ARMs) and a fixed payment for a longer period of time than most adjustable rate loans. For example, a "5/1 loan" has a fixed monthly payment and interest for the first five years and then turns into a traditional adjustable-rate loan, based on then-current rates for the remaining 25 years. It's a good choice for people who expect to move (or refinance) before or shortly after the adjustment occurs.

First-Time Homebuyer
A flexible financing program available for first-time homebuyers to make purchasing a home as easy as possible. Advantages include a lower down payment, lower interest rates, and reduced closing costs. Be sure to check out our Homebuyer Education page for helpful tips on how to get started.

Jumbo Loans
Jumbo loans, also called non-conforming loans, are ideal for buyers who need a larger mortgage. Since 2009, nonconforming loans are any loans that exceed the following: $417,000 for single family, $533,850 for 2-unit, $645,300 for 3-unit, and $801,950 for 4-unit.

Refinancing
Refinancing pays off your existing loan with a new loan. Borrowers usually refinance to lower their existing interest rate and/or to obtain cash from their equity.

Construction
A flexible financing program available for first-time homebuyers to make purchasing a home as easy as possible. Advantages include a lower down payment, lower interest rates, and reduced closing costs. Be sure to check out our Homebuyer Education page for helpful tips on how to get started.

Loans subject to credit approval.

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864 Massachusetts Ave, Arlington, MA  02476
Toll Free:  (781) 641-8600
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