A fixed-rate mortgage remains consistent over the entire term of the loan. That means monthly payments are more predictable because the total amount of principal and interest that you pay each month does not change.

• Insurance and taxes, which are often included in your monthly payment if your loan is escrowed, likely will increase over time because these costs generally rise.
• A fixed-rate option could be best if you value more certainty in long-term costs.

These types of mortgages do exactly what their name suggests—the rates adjust periodically. Adjustable-rate mortgages (ARMs) typically have 2 periods:

• During the initial period, often 5 or 7 years, your interest rate is fixed and won’t change.
• After the initial period, your loan is subject to adjustment periods, and the rates will adjust to current market conditions. This means there is a risk of the rate and the monthly payment increasing.

ARM terms vary though, so contact a Mr. Cooper Mortgage Professional for more information.

Loan amounts for most government-backed mortgages are capped based on the county where the property is located. Today, most counties have a limit of $766,550 for “Conventional” loans.

But if you need a higher limit, there are “Jumbo Loan” options that can allow qualifying homebuyers to borrow up to $2.5M.

While you might see 20% as the common down payment amount suggested for your mortgage, there are options where qualifying borrowers can put as little as 3.5% or even 0% down.
These options are usually available through government programs to help make mortgages more affordable for homebuyers.

Some loans and lenders allow homebuyers to roll their closing costs into the mortgage—freeing up cash that would otherwise be paid on the day the loan closes.

Some government-backed programs make it easier for borrowers with lower credit scores to qualify for mortgages. You may hear FHA loans mentioned. These are loans backed by the Federal Housing Administration.

But there may be state or local programs available too that help borrowers who otherwise wouldn’t be able to afford or qualify for a mortgage.

Former and active-duty service members and qualifying family members may be eligible to take advantage of special veteran-only benefits such as:

• flexible credit requirements;
• lower-interest mortgages; and
• capped closing costs.

Make sure to ask one of our Mortgage Professionals about this option if you are a veteran.