Choosing a Mortgage That Best Fits Your Needs Financially

When you're ready to buy a home, choosing the right mortgage is a crucial decision. A mortgage is a long-term loan that will affect your financial health for years to come, so it's important to consider your options carefully. With so many different types of mortgages available, you might feel overwhelmed. However, understanding the key features of each mortgage type can help you make an informed decision.

Not all home loans are created equal. Choosing the right loan is key to getting the best deal. A loan option is typically composed of three different things: loan term, mortgage rate type, and loan type. Each of these factors can significantly impact your monthly payment, your overall costs both upfront and over time, and your level of risk.

The term of your loan is how long you have to repay it. The most common loan terms are 30 years and 15 years, but there are other options available as well. Choosing the right loan term is critical because it affects your monthly payment, mortgage rate, and how much interest you will pay over the life of the loan.

Loan Type

Purchase Refinance with Cash out Refinance

State

Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District Of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming

FICO Score

Superior (780-850) Exceptional (760-779) Excellent (740-759) Very Good (720-739) Good (700-719) Above Average (680-699) Average (660-679) Fair (640-659) Need Improvement (620-639) Poor (350-620)

Loan Amount

$

Points

Up to 0 points Up to 0.5 points Up to 1 points Up to 1.5 points Up to 2 points Up to 2.5 points Up to 3 points

LTV

%

Loan Term

 15-Year Fixed  20-Year Fixed  30-Year Fixed  5-Year ARM  7-Year ARM  10-Year ARM

Show Advertiser Disclosure

The lenders whose rates and other terms appear on this chart are ICB's advertising partners. They provide their rate information to our data partner RateUpdate.com. Unless adjusted by the consumer, advertisers are sorted by APR from lowest to highest. For any advertising partners that do not provide their rate they are listed in advertisement display units at the bottom of the chart. Advertising partners may not pay to improve the frequency priority or prominence of their display. The interest rates, annual percentage rates and other terms advertised here are estimates provided by those advertising partners based on the information you entered above and do not bind. Any lender Monthly payment amounts stated do not include amounts for taxes and insurance premiums. The actual payment obligation will be greater if taxes and insurance are included. Although our data partner RateUpdate.com collects the information from the financial institutions themselves, the accuracy of the data cannot be guaranteed. Rates may change without notice and can change intraday. Some of the information contained in the rate tables including but not limited to special marketing notes is provided directly by the lenders. Please verify the rates and offers before applying for a loan with the financial institution themselves. No rate is binding until locked by a lender.

Lender

APR / Rate

Fees / Points

Payment

NMLS #2473786

5.045%

15-Year Fixed

4.875%

$4,523

Includes 0.857 points for $3,428

Lender Fees: $1,095

$3,138 /mo

Next >

NMLS #1085173

5.056%

15-Year Fixed

4.875%

$4,870

Includes 0.875 points for $3,500

Lender Fees: $1,370

$3,138 /mo

Next >

NMLS #2059741

5.117%

15-Year Fixed

4.990%

$3,360

Includes 0.840 points for $3,360

Lender Fees: $0

$3,162 /mo

Next >

NMLS #757416

5.141%

15-Year Fixed

4.990%

$3,988

Includes 0.997 points for $3,988

Lender Fees: $0

$3,162 /mo

Next >

NMLS #324599

License: 324599

5.239%

15-Year Fixed

5.125%

$3,070

Includes 0.500 points for $2,000

Lender Fees: $1,070

$3,190 /mo

Next >

NMLS #1312186

5.365%

15-Year Fixed

5.250%

$3,000

Includes 0.750 points for $3,000

Lender Fees: $0

$3,216 /mo

Next >

NMLS #6606

5.392%

15-Year Fixed

5.240%

$3,992

Includes 0.998 points for $3,992

Lender Fees: $0

$3,214 /mo

Next >

NMLS #1954591

License: 60DBO-113383

5.394%

15-Year Fixed

5.250%

$3,835

Includes 0.682 points for $2,728

Lender Fees: $1,107

$3,216 /mo

Next >

NMLS #2473786

5.466%

5-Year ARM

5.375%

$4,067

Includes 0.743 points for $2,972

Lender Fees: $1,095

$2,240 /mo

Next >

NMLS #1025894

5.503%

15-Year Fixed

5.375%

$3,348

Includes 0.662 points for $2,648

Lender Fees: $700

$3,242 /mo

Next >

NMLS #1085173

5.866%

5-Year ARM

5.750%

$5,146

Includes 0.944 points for $3,776

Lender Fees: $1,370

$2,335 /mo

Next >

NMLS #2473786

5.947%

30-Year Fixed

5.875%

$3,135

Includes 0.510 points for $2,040

Lender Fees: $1,095

$2,367 /mo

Next >

NMLS #757416

5.954%

30-Year Fixed

5.875%

$3,436

Includes 0.859 points for $3,436

Lender Fees: $0

$2,367 /mo

Next >

NMLS #2059741

5.955%

30-Year Fixed

5.875%

$3,476

Includes 0.869 points for $3,476

Lender Fees: $0

$2,367 /mo

Next >

NMLS #1085173

5.963%

30-Year Fixed

5.875%

$3,870

Includes 0.625 points for $2,500

Lender Fees: $1,370

$2,367 /mo

Next >

NMLS #1312186

5.964%

5-Year ARM

5.875%

$3,876

Includes 0.969 points for $3,876

Lender Fees: $0

$2,367 /mo

Next >

NMLS #324599

License: 324599

5.990%

30-Year Fixed

5.875%

$5,070

Includes 1.000 points for $4,000

Lender Fees: $1,070

$2,367 /mo

Next >

NMLS #1954591

License: 60DBO-113383

6.094%

5-Year ARM

5.990%

$4,543

Includes 0.859 points for $3,436

Lender Fees: $1,107

$2,396 /mo

Next >

NMLS #324599

License: 324599

6.104%

5-Year ARM

5.990%

$5,006

Includes 0.984 points for $3,936

Lender Fees: $1,070

$2,396 /mo

Next >

NMLS #1025894

6.200%

30-Year Fixed

6.125%

$3,196

Includes 0.624 points for $2,496

Lender Fees: $700

$2,431 /mo

Next >

NMLS #1312186

6.207%

30-Year Fixed

6.125%

$3,500

Includes 0.875 points for $3,500

Lender Fees: $0

$2,431 /mo

Next >

NMLS #1954591

License: 60DBO-113383

6.207%

30-Year Fixed

6.125%

$3,567

Includes 0.615 points for $2,460

Lender Fees: $1,107

$2,431 /mo

Next >

NMLS #399799

6.213%

30-Year Fixed

6.125%

$3,900

Includes 0.643 points for $2,572

Lender Fees: $1,328

$2,431 /mo

Next >

NMLS #6606

6.329%

30-Year Fixed

6.240%

$3,768

Includes 0.942 points for $3,768

Lender Fees: $0

$2,461 /mo

Next >

Rate data provided by RateUpdate.com. Displayed by ICB, a division of Mortgage Research Center, NMLS #1907, Equal Housing Opportunity. Payments do not include taxes and insurance premiums. Actual payments will be greater with taxes and insurance included. Rate and product details.

Typically, the longer your loan term, the more interest you will pay. Loans with shorter terms usually have lower interest costs but higher monthly payments than loans with longer terms. However, a lot depends on the specifics. Exactly how much lower the interest costs and how much higher the monthly payments could be depends on which loan terms you're looking at as well as the mortgage rate.

If you can afford higher monthly payments, a shorter-term loan might be the best option because it will save you money overall. Shorter terms usually have lower mortgage rates, which means you'll pay less interest over the life of the loan. However, if your budget is tight, a longer-term loan might be more manageable because it has lower monthly payments.

Mortgage Rate Type

Mortgage rates come in two basic types: fixed and adjustable. Choosing the right mortgage rate type is crucial because it affects whether your mortgage rate and monthly principal and interest payment can change over time, and how much interest you will pay over the life of the loan.

Fixed-Rate Mortgages: A fixed-rate mortgage offers the stability of a locked-in mortgage rate and monthly payment. This type of mortgage provides the certainty of knowing that your monthly payment won't change over the life of the loan. With a fixed-rate mortgage, you can budget with confidence because you know exactly what your payment will be. Fixed-rate mortgages are ideal for those who value certainty about their loan costs over the long term.

Adjustable-Rate Mortgages (ARMs): An adjustable-rate mortgage offers less predictability than a fixed-rate mortgage but may be cheaper in the short term. An ARM typically starts with a fixed rate for a set period, usually 3, 5, 7, or 10 years, and then the rate can adjust up or down based on the market. ARMs are ideal for those who plan to move again within the initial fixed period of an ARM. However, if you stay in your house longer than expected, your mortgage rate and monthly payment could increase significantly, even doubling in some cases.

Mortage Type

There are different types of home loans available, and each has its unique features. Here are some of the most common types of home loans:

Conventional Loans: A conventional loan is a mortgage not insured by a government agency such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). These loans usually require higher down payments and have stricter qualification requirements.

FHA Loans: An FHA loan is a mortgage insured by the Federal Housing Administration. These loans are popular among first-time homebuyers because they typically require a lower down payment and more relaxed credit score requirements.

VA Loans: VA loans are backed by the U.S. Department of Veterans Affairs and are designed to help veterans, service members, and eligible surviving spouses become homeowners. Your upfront costs Your monthly payment Your ability to qualify for other loans Compare your VA loan options

To be eligible for a VA loan, you or your spouse must meet the basic service requirements set by the Department of Veterans Affairs, and you must obtain a Certificate of Eligibility from the VA to prove you meet the service requirements.

To sum up, when choosing a mortgage, it is important to understand the loan options available, including the loan term, mortgage rate type, and loan type. Your choice of loan term will affect your monthly payment, your mortgage rate, and how much interest you will pay over the life of the loan. Your choice of mortgage type will affect whether your mortgage rate can change, whether your monthly payment can change, and how much interest you will pay over the life of the loan. Finally, your choice of loan type will affect your upfront costs, your monthly payment, and your ability to qualify for other loans. By understanding these choices and how they affect your overall costs, you can make an informed decision that best fits your needs and budget.