Mortgage Comparison

Compare home loans to find the best mortgage for your borrowing needs

One home loan does not fit all, but which one fits you best? When you choose to make one of life's major purchases — a home — you're faced with multiple financial decisions. Applying for a mortgage is certainly one of the biggest pieces of the puzzle, and even there, you have more options than you may have realized.

Do you want a fixed rate mortgage? Do you know when to apply for a jumbo mortgage? Not sure? Review this mortgage comparison to get an accurate picture of your borrowing options.

Home loan comparison: Rate structure

The most common differentiator between conventional mortgages is the nature of the interest rate. You've probably heard of fixed and adjustable rate mortgages (ARMs). These popular products serve different needs, so use this quick chart when comparing mortgage options:

Mortgage Rate Structure Terms
Fixed rate mortgages Fixed rate for life of loan 15 or 30 years
Adjustable rate mortgages Low introductory rate followed by a rate that can adjust annually for rest of term Introductory period of 3, 5 or 7 years with 30 year loan term

Homeowners who want to budget for a consistent monthly payment often choose a fixed rate mortgage. Similarly, if you want to pay off your house quickly, the shorter 15-year fixed rate mortgage may be better suited for your goals.

On the other hand, homeowners who can't afford high payments right now but foresee a rise in income may opt for an ARM. Depending on your choice, you'll have an initial period of three, five or seven years that typically features an interest rate that's lower than the fixed rate. After that period expires, the rate is subject to change every year based on LIBOR. If, at that point, you would prefer stable payments, you could refinance into a fixed rate mortgage.

Home loan comparison: Property value

Another key factor in your mortgage comparison is the value of the property. If you're buying a luxury home or live in an especially expensive housing market, a conventional fixed rate or adjustable rate mortgage may not be possible. In this case, look at jumbo mortgages. Jumbo mortgages are specially designed for homes priced over a certain level (as determined by the government). If your home costs upwards of $400,000, you may have to go with a jumbo mortgage. There's a good chance you'll need an excellent credit score and large down payment to qualify.

Home loan comparison: Payment options

Depending on your credit and financial solution, you may investigate alternative payment plans with your lender. For example, some lenders require you to open an escrow account that pays your mortgage, insurance and property taxes in one payment while others don't. Be sure to ask about the pros and cons of escrow if you have the choice.

Compare your mortgage options with Citizens Bank

Deciding to buy a home is exciting and potentially stressful, but you don't have to navigate this mortgage process alone. You can call a Citizens Bank home loan advisor at 1-888-514-2300 with any questions you have.

 

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