Mortgage 101

    Various mortgage products exist from fixed rate to adjustable as well as specialty programs backed by the Federal Government. When it is time to purchase or refinance Ultra can help you identify the optimal solution for your specific situation.

    What Type of Mortgage Should You Apply For?


    Multiple factors determine what options are available. Read a quick overview of some of the more common mortgage products below then contact us with any questions.

    Types of Mortgages

    An overview of the pros and cons of some of the more common mortgages available.

    Mortage Products
    Tailored to Your Needs

    ARM (Adjustable Rate Mortgages)

    A good option for the buyer who knows they will most likely only be in the mortgage for a short period of time due to either a planned relocation or the ability to pay off the loan in a few years. ARMs typically come with lower initial payments however payments can significantly increase at the end of the loan period. There are various types of ARMs available including 5/1, 10/1 and other options. These are known as hybrid mortgages where for example in a 5/1 ARM the first 5 years of interest is at a fixed rate then the rate is adjusted every year after that period based on a published interest rate index.

    PROS
    • A low fixed-rate intro period that could save you money if you are planning on being in the mortgage for a short period of time
    • If interest rates drop your payment could stay the same or decrease

    CONS
    • If rates increase your monthly payments can jump significantly after the introductory period
    • Some ARMs have a prepayment penalty which can force you into paying for the loan for a specific time period

    Fixed Rate

    Fixed Rate Mortagages are common options due to the predictability of the payments. The interest rate does not change for the life of the loan making these options straightforward when comparing rates and the life of the loan among different lenders. Compared to ARMs these loans are simple to figure out the math and what you will be paying overall with each option. If rates are generally low and you plan on keeping your loan long-term, a fixed rate loan could be an ideal option allowing you to lock in the lower rate for the life of the loan. However, if rates decrease the benefit of the fixed rate loan is undermined. Ultra can customize the term of your fixed rate mortgage outside of the traditional products currently offered on the marekt. 14 or 27 year mortgage term? We can do that.

    PROS
    • Fixed payments for the life of the loan
    • When rates go up, your interest rate won't
    • Easy to figure out total cost of loan
    • Financial savings can be had if you keep the loan long-term and rates increase

    CONS
    • If rates continue to drop, locking in your rate at a higher interest rate will cost you more then if you had waited
    • Interest rates are generally higher than the initial rates available with ARMs

    FHA, VA and USDA

    These loans are specially backed federal programs intended for specific buyers. The VA loan is a program guaranteed by the Department of Veterans Affairs and is intended to benefit veterans of the armed services and their spouses. VA loans can be obtained with 0 money down on a loan slightly over $400,000 depending on qualifications.

    FHA loans are another federally backed program run by the Federal Housing Administration. The FHA insures private loans issued for new and existing housing and loans for home repairs. The FHA helps borrowers obtain amounts they qualify for and aid lenders by reducing risk. Ask us more for more information on how to qualify for either of these specially designated programs.

    The Bottom Line

    Enter your home purchase price, down payment, rate and mortgage term to calculate your estimated payment.

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    * This payment does not include real estate taxes, mortgage insurance or homeowners insurance and is presented for illustrative purposes only.

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    Mortgage Education

    A little education goes a long way. You've come to the right place.

    Mortgages: ARM or Fixed?

    Learn about the pros and cons of these different mortgage types.

    Calculate Your Payments

    Use our online calculator to estimate your payments and total cost.

    A Checklist for Your First Home

    First time buyer? Here is a handy checklist dealing with the purchase of your first home.

    Refinancing Your Home

    When is the best time to refinance and what pitfalls should you beware of?

    Let's Get Started

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