One of the most stressful parts of shopping for mortgages is undoubtedly finding the rate that is right for your budget and needs. With so many options out in the wild, it can be tough to know where to find the best rate, and what to look for. Today, we’re going to weigh some of the options available when shopping Maryland mortgage rates.
Types of Maryland Mortgage Rates and Loans
The rate you ultimately select is going to be dependant on the type of loan you choose. There are a variety of options, with some only available to certain types of homebuyers. Let’s break down the most common options available to you as a home-buyer.
30-Year Fixed-Rate Mortgage
A 30-year fixed-rate mortgage is one of the most common options available. As the name implies, you take on a loan with a 30-year payment period where the interest rate doesn’t change. Some pros to this option are that you will likely have a more affordable monthly rate than shorter loan options. Because the rate is fixed, there is also more predictability to your monthly payments.
15-Year Fixed-Rate Mortgage
The 15-year fixed-rate mortgage plays off the same premise of a 30-year loan, but the shorter time means it’s often used for different reasons. This option is a strong choice for those looking to refinance. Your monthly payments will be higher than a 30-year loan, but the interest payments will be cheaper than the long-term option.
Adjustable-rate mortgages offer a unique kind of flexibility. You select a mortgage rate that is locked in for a set amount of time, say five years, and then is adjusted after that period lapses. This can be advantageous if you believe mortgage rates may be lower in the future, or if you aren’t planning to have the mortgage for an extended period of time. The downside is that if the rates are higher when the readjustment period comes, you can end up with a higher rate than you initially expected.
Now, we begin to get into mortgages that may only apply to specific types of buyers. A Federal Housing Administration (FHA) mortgage is a loan insured by the federal government’s FHA. They are designed to help more moderate-income earners be able to afford the home buying process. The two key aspects of an FHA mortgage are that buyers can pay as little as 3.5% of the home cost for the downpayment and that those with credit scores as low as 500 may be able to apply. FHA loans help make Maryland mortgage rates more affordable by lessening some of the barriers to entry.
VA mortgages are backed by the Department of Veterans Affairs. These loans are available to active duty service members as well as veterans. VA mortgages have distinct advantages, including no required downpayment on most properties, but there are income and property-value caps depending on the region. If you are a service member or veteran, this may be a great option for you.
USDA mortgages are backed by the US Department of Agriculture and are reserved for those who wish to purchase a property located in rural areas. However, some suburban properties may qualify as well. Like VA Mortgages, most USDA home loans do not require a down payment. This option is rather specialized but is great for buyers searching for specific types of property.
Find Great Maryland Mortgage Rates with Federal Hill Mortgage
In the world of mortgages, there are a variety of options that can dictate the rate you end up with. Above all, it’s important to have a qualified, professional team in your corner helping you secure the best rate available. Federal Hill Mortgage is the top-ranked mortgage lender in Maryland. We can help you secure the home of your dreams. Get started on your application today.