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What Kinds of Mortgages Are Available?


With all the dire news about housing, one can get the impression that it can be tough to qualify for a mortgage. In Indiana and Michigan, home prices are somewhat stable and mortgage financing remains strong. Home buying and refinancing is still happening at a brisk pace. Appraisals seem to be the toughest hurdle, but values are nowhere near as bad as in other parts of the country. This begs the question: what mortgage products are available for homeowners looking to buy or simply refinance their existing home loan?

Conventional fixed rate mortgages are popular for homebuyers and homeowners looking to refinance their existing mortgage loan. Conventional mortgage loans have a fixed interest rate. Fixed interest rates don’t move or readjust like adjustable rate mortgages. They typically have no prepayment penalty and can be paid off early. Many homeowners include extra principle in their payments in order to pay their mortgages off early.

Conventional mortgages have three main products

30-Year Term
This is a 30-year amortization loan with a fixed interest rate. Many people choose this term because they can finance their homes while having smaller payments over a longer period of time.

20-Year Term
This loan has a 20-year amortization loan. Sometimes people chose this mortgage as they are refinancing and don’t want to “Step Back” – or lose the time they’ve already spent paying on their mortgage. The significant drop in interest rates lately have made this mortgage more desirable because the homeowner can shave years off of their mortgage while also dropping their payment.

15-Year Term
The 15-year mortgage loan is an even shorter term loan. This loan term is chosen much for the same reason as the 20-year term.  It shortens the loan period, allowing the homeowner to pay off their home more quickly.

All three products are great ways to finance your home. Horizon Bank’s mortgage loan officers can help you decide which loan term is the best for you and your family. Contact us today to set up an appointment with a member of our team.




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