Mortgage Types: Which is Right for You?

Oct 27, 2017

Do you know what mortgage type is right for you? Take a look at the different types of real estate mortgages. Each one has their own advantages and disadvantages.

Adjustable Rate

An ARM will have a variable interest rate. Typically, it is lower at the start of the mortgage. It will either fluctuate over the entire life of the mortgage, or be fixed for a period of time, 10 years perhaps, and then fluctuates for the rest of the mortgage.

Interest rate drops so does your payment
Save money if you sell before fixed period ends

If there’s no fixed rate period, payment changes
Potential for payment you can’t afford

Fixed Rate

Fixed rate mortgages have the same interest rate for the length of the mortgage. This is the most popular mortgage, with about 3/4 of the market.

Mortgage length 15, 20, or 30 years
Predictable payments

Higher interest rate
Pay closing costs again if you refinance


These are made through traditional methods with no government backing. With good credit and a substantial down-payment, this is a good option.

Can be fixed rate or adjustable
Better interest rates

Higher down payment
Closing costs and fees must be paid at settlement
Higher fees

FHA and VA

These loans are backed by the government. VA is specifically for active military, eligible veterans, and surviving spouses.

Smaller or no down payment
Easier to qualify
Credit score isn’t as important

Loan amounts limited by location
Possibly higher payments

These are the most common loan types. Which one is right for you? Contact Beaches Title Services today for more information.