Buying a home is one of the biggest financial decisions you'll make, and choosing the right mortgage is just as important as picking the perfect house. Understanding the difference between fixed-rate and adjustable-rate mortgages (ARMs) can help you make an informed choice. Let’s explore these two mortgage types and the Consumers National Bank products available under each.

Fixed-Rate Mortgages: Stability for the Long Term

A fixed-rate mortgage offers a consistent interest rate and monthly payment throughout the loan term, usually 15, 20, or 30 years. This stability makes it ideal for buyers who plan to stay in their home for a long time and want predictable payments. Fixed-rate mortgages provide peace of mind, ensuring that even if market interest rates fluctuate, your payment remains the same.

Consumers National Bank Fixed-Rate Mortgage Options

• Conventional Fixed-Rate Mortgages: Ideal for buyers with strong credit and stable income, offering both short- and long-term loan options.
• FHA Fixed-Rate Loans: A great choice for first-time homebuyers or those with lower credit scores, featuring a lower down payment requirement.
• VA Fixed-Rate Loans: Available to veterans and active-duty service members with no down payment and no PMI.
• USDA Fixed-Rate Loans: Designed for qualified buyers in rural areas, offering low or no down payment options.
• Bridge Loans: Ideal for buyers transitioning between homes, allowing up to 85% of the equity in the current home to be used for a new purchase, with interest-only payments for up to 12 months.
• Consumers Community Difference™ Mortgage: Provides up to 100% financing with no private mortgage insurance, making homeownership more accessible.
• Consumers Home Construction Loans: Offers flexible financing with interest-only payments during construction, making it easier to build your dream home.

Adjustable-Rate Mortgages (ARMs): Flexibility with Initial Savings

Anadjustable-rate mortgage (ARM) starts with a lower interest rate for an initial fixed period (such as 5, 7, or 10 years), after which the rate adjusts periodically based on market conditions. This option allows for lower initial payments, making it an attractive choice for those planning to move or refinance before the rate adjustments begin. However, there is some risk involved as rates and payments may increase over time.

Consumers National Bank Adjustable-Rate Mortgage Options

• Adjustable-Rate Conventional Loans: Suitable for buyers who expect to relocate or refinance within a few years, taking advantage of lower initial rates.
• Jumbo ARM Loans: For buyers looking at higher-priced properties, offering competitive rates for the initial term before adjustments begin.

Choosing the Right Mortgage for You

When deciding between a fixed-rate and an adjustable-rate mortgage, consider your financial stability, homeownership timeline, and risk tolerance. If you value predictability and plan to stay in your home long-term, a fixed-rate mortgage is likely the best choice. If you anticipate moving or refinancing within a few years, an ARM might save you money in the short term.

At Consumers National Bank, we’re here to help you navigate your mortgage options and find the best solution for your financial goals. Our expert loan officers can guide you through the process, answer your questions, and provide personalized mortgage solutions.

Ready to take the next step? Contact us today to discuss your mortgage options and start your journey toward homeownership!