Conventional Refinance Loans
I can help you find the right conventional mortgage for your home purchase or refinance.
A conventional mortgage might be the right solution for your long-term financial goals. Whether you're looking to refinance or purchase a home, Clendi Villar with River Bear Financial, LLC can help determine the best approach to meet your needs.
Fixed Rate Mortgages
A fixed-rate mortgage keeps your interest rate and monthly payment steady throughout the life of the loan, offering stability and predictability.
Advantages:
- Interest rate and payment will not change during the loan's term.
- Provides financial stability since market fluctuations don't impact your payments.
Disadvantages:
- The initial rate may be higher than that of an adjustable-rate mortgage (ARM).
- Monthly payments could be higher compared to an ARM.
- Rates won’t decrease when market rates fall.
Adjustable Rate Mortgages (ARM)
An ARM typically offers a lower initial interest rate than a fixed-rate mortgage, but the rate may change after a set period. For example, a 3/1 ARM has a fixed rate for the first three years and adjusts annually afterward.
Advantages:
- Potentially lower initial rates and monthly payments.
- Payments may decrease if market rates drop.
- Adjustable terms can be capped to limit increases.
Disadvantages:
- Rates may increase if market rates rise, causing payments to go up.
- Payment caps could result in negative amortization (payments that don’t cover interest).
An ARM is most beneficial if you plan to move before the rate adjusts or if you expect interest rates to stay low.