Mortgage companies are a dime a dozen, but lenders that focus on the unique needs of first responders are few and far between.
First things first
If you’ve decided to apply for a first mortgage, this can be a very exciting time in your life. Once approved, you’ll be on your way to home ownership!
The first thing you’ll want to do when you apply for a firefighter mortgage in the state of Washington, is to decide which type of mortgage will work best for you and your family.
Our company offers fixt rate mortgages, adjustable rate mortgages and hybrid mortgages. The differences between these three types of lending options are as follows:
- Fixed rate mortgage This type of loan is one of the most common types of firefighter mortgages that lenders offer. With this option, the loan will have a fixed rate of interest that will remain in place for throughout the term of the loan. This means that your monthly installment amount that will be the same on day one as it is on the day you make your final payment.
- Adjustable rate mortgage (ARM) This type of mortgage is also known as a variable rate mortgage. For this option, your monthly payment amount can change from year to year because your payment amount will be based on the federal fund interest rate, which is set by the Federal Reserve. You’ll want to keep in mind that interest rates are difficult to predict, and if interest rates jump significantly, your mortgage payment could become much higher as well. On the other hand, if interest rates go down, you could stand to benefit.
- Hybrid mortgage A hybrid mortgage combines the features of both fixed rate and adjustable rate mortgages and in most cases, the initial, stable interest rate will last for a period of up to 10 years. What makes them attractive, is that the initial interest rate is typically less than you’d pay with a fixed-rate loan. Once the term expires, the loan will convert to an ARM. This type of mortgage is ideal for people who are wanting to sell or refinance their homes before the fixed rate period expires.
Deciding Which Firefighter Mortgage Option is Right for You
When it comes to deciding which firefighter mortgage is right for you, you’ll want to speak with both your spouse and your lender. If you only plan on owning your home for a few years, and ARM may be a good option, because you’ll save money on your monthly payments.
If you know you’ll be in your home a little longer, but you don’t plan to own it for 30 years, you a hybrid mortgage may work better.
Or, if the home you’re buying is the home you plan to live in for the rest of your life, and you have concerns about how fluctuating interest rates could impact your monthly payments, a long-term fixed-rate mortgage may help put your mind at ease.