Mortgage Options with Great Plains Bank
Fixed Rate Mortgages
With a fixed-rate loan, your monthly payment of principal and interest never change for the life of your loan. Your property taxes may go up (we almost said down, too!), and so might your homeowner's insurance premium part of your monthly payment, but generally with a fixed-rate loan your payment will be very stable.
Fixed-rate loans are available in all sorts of shapes and sizes: 30-year, 20-year, 15-year, even 10-year. Some fixed-rate mortgages are called "biweekly" mortgages and shorten the life of your loan. You pay every two weeks, a total of 26 payments a year -- which adds up to an "extra" monthly payment every year.
During the early amortization period of a fixed-rate loan, a large percentage of your monthly payment goes toward interest, and a much smaller part toward principal. That gradually reverses itself as the loan ages.
You might choose a fixed-rate loan if you want to lock in a low rate. If you have an Adjustable Rate Mortgage (ARM) now, refinancing with a fixed-rate loan can give you more monthly payment stability.
30-Year Fixed Rate Loan- Because of its length, this is the most affordable and most popular conventional loan. It features a fixed rate and lower predictable payments
15- year Fixed Rate Loan- The advantage of a 15-year loan are interest costs and repayment terms are both cut in half, Plus, you build equity faster.
Adjustable Rate Mortgages
Adjustable Rate Mortgages -- ARMs, as we called them above -- come in even more varieties. Generally, ARMs determine what you must pay based on an outside index, perhaps the 6-month Certificate of Deposit (CD) rate, the one-year Treasury Security rate, the Federal Home Loan Bank's 11th District Cost of Funds Index (COFI), or others. They may adjust every six months or once a year. Most programs have a "cap" that protects you from your monthly payment going up too much at once. There may be a cap on how much your interest rate can go up in one period -- say, no more than two percent per year, even if the underlying index goes up by more than two percent. You may have a "payment cap," that instead of capping the interest rate directly caps the amount your monthly payment can go up in one period. In addition, almost all ARM programs have a "lifetime cap" -- your interest rate can never exceed that cap amount, no matter what.
ARMs often have their lowest, most attractive rates at the beginning of the loan, and can guarantee that rate for anywhere from a month to ten years. You may hear people talking about or read about what are called "3/1 ARMs" or "5/1 ARMs" or the like. That means that the introductory rate is set for three or five years, and then adjusts according to an index every year thereafter for the life of the loan. Loans like this are often best for people who anticipate moving -- and therefore selling the house to be mortgaged -- within three or five years, depending on how long the lower rate will be in effect.
You might choose an ARM to take advantage of a lower introductory rate and count on either moving, refinancing again or simply absorbing the higher rate after the introductory rate goes up. With ARMs, you do risk your rate going up, but you also take advantage when rates go down by pocketing more money each month that would otherwise have gone toward your mortgage payment.
FHA and VA Loans
Two government agencies, the Federal Housing Administration and the Veterans Administration, sponsor mortgage programs which help home buyers who may not be able to qualify for a loan under conventional guidelines. The agencies do not make loans directly, but insure or guarantee the mortgage lender against loss if the borrower defaults on the payments.
Because the government agency assumes much of the risk, the mortgage lender can use more lenient qualifying guidelines with regard to income, down payment requirements and debt ratios. Both fixed & adjustable interest rates are available.
Contact us today to learn more about FHA and VA home loans.
Construction / Permanent Mortgages
Here at Great Plains Bank we will work with you from the time you start construction until the project is completed. During the construction phase of your loan you are only charged interest on the money that has been borrowed to date. We'll assist you with the lien waivers, and provide you with a contractors statement at the completion of your home building.
And remember, we're local, and local decision making leads to fast decisions on your construction approval.
Do you want some extra money? Maybe to pay for home remodeling or improvements? Or to pay your children’s college tuition or to take that dream vacation? Whatever the need, a cash-out refinance can provide you with the funds.
A cash-out refinance means you’ll want to qualify for a loan for more than the current balance remaining on your existing mortgage. If you’ve been in your current mortgage for a number of years and/or if your current mortgage has a higher interest rate, you may be able to move into a cash-out refinance without increasing your monthly payment.
Do you have other debt you’d like to consolidate? A cash-out mortgage can help you use the equity you have built-up in your home to pay off debts with higher interest rates. For example, credit cards, home equity loans, automobile loans, student loans, personal loans – all can be consolidated with a cash-out refinance. This can potentially save you hundreds of dollars a month!
Give us a call or stop by to discuss how a cash-out refinance can help you reach the next step!
Put your money to work for you in an investment property. With today’s low mortgage rates it is an ideal time to invest in real property. Investment properties provide a mechanism that allows you to enjoy the potential for market appreciation while building equity each month. Whether you are purchasing or refinancing a rental home, condo, apartment complex, or piece of land, we offer various loan products to help you finance your investment property and start making money and building equity.
Contact Great Plains Bank today to learn about how we can help finance your investment property.
2nd/Vacation Home Mortgages
It's vacation season. Whether you're enjoying a beach front house, country cottage, or mountain chalet, chances are you have a vision of calling your favorite vacation spot "home" one day. With an expected increase in demand and today's favorable interest rates, it's a great time to invest in a second home. In fact, it's a wise investment. As baby boomers begin to retire, it's expected that more than 30 million Americans will buy a vacation home within the next decade.
With rising demand in popular vacation areas, knowing your vacation home mortgage options and how much you can afford can make a big difference in getting your perfect vacation home. Many homeowners use the equity in their primary home to finance their vacation investment, or take advantage of other vacation home mortgage options.
Learn more about how you can finance your vacation or second home by calling Great Plains Bank today. We’re here to help you reach the next step!