Your Guide to Mortgages

Many buyers believe that mortgages are are "one size fits all" deal—but that couldn't be further from the truth! In reality, there are hundreds of different loans you can choose from, which makes it easy to customize a mortgage that fits your unique needs. If you need help finding the right fit, or if you're interested in estimating your monthly payments, you've come to the right place.

Ready to get started? Here's a crash course on a few of the most popular loans for buyers in the Montgomery County area. And if you still have questions or need lender recommendations, I'm always just a phone call away!

Determine How You'll Pay Interest

When it comes to mortgages, you have more options than you might think. You even get to choose an interest rate that works best for you! Here are some of the most common types of loans and interest options:

Fixed-Rate Mortgage

  • The interest rate remains the same as you pay off the loan
  • Your payments will always be the same amount
  • Very predictable

Adjustable-Rate Mortgage

  • The interest rate may start off low, then fluctuate to match current rates
  • Rates can increase or decrease to match the current market
  • Monthly payments will also increase or decrease

Two-Step Mortgage

  • Also called 5/25s or 7/23s
  • Has a fixed interest rate for the first 5 or 7 years, then converts to match market rates
  • Can be converted into a fixed-rate loan or automatically become an ARM

Choose Your Loan Type

Once you've settled on the right interest rate, it's time to take a closer look at the types of loans available in the Montgomery County and Greater DC areas. Here are a few types that are popular with today's buyers:

Conventional Loan

  • Usually takes 15 or 30 years to pay off
  • Can be fixed-rate or adjustable
  • Often requires great credit, financial history, and a 20% down payment

USDA Rural Loan

  • Only available in rural areas west of Montgomery County
  • As little as 0% down payment
  • Targets buyers with "steady, low, or modest income"

FHA Loan

  • Flexible income and credit requirements
  • 3 – 5% down payment options
  • Requires mortgage insurance and could have higher interest rates

VA Loan

  • Available for active duty military and veterans
  • As little as 0% down payment with no mortgage insurance
  • Could require a one-time funding fee

Balloon Mortgage

  • Has a short term of 5 – 7 years, but payments are based on a 30-year loan
  • At the end of the term, the borrower must pay off, refinance, or convert the loan
  • Can have lower interest rates and credit requirements

Shared-Appreciation

  • Buyers get lower rates, but they share some of their profit with the lender if they sell
  • Lenders only make money when the home sells, and borrowers lose some equity
  • Potential solution for low-income buyers

1st Time Advantage Loans

  • Maryland's most popular first-time buyer program
  • Extremely competitive interest rates
  • Comes with a $5,000 loan with 0% interest for closing costs and a down payment

Lender-Specialty Loans

  • Many banks or mortgage brokers offer their own programs
  • Often have lower down payment or credit requirements
  • Tailored to benefit first-time or low-to-moderate income buyers

Calculate Your Mortgage

Now that you've learned the ins and outs of home loans, it's time to crunch a few numbers. Start calculating your potential monthly payment with my mortgage calculator, and let me know if there's anything I can do to help.

Mortgage Calculator

Ready to Make a Move?

Finding the right mortgage is no walk in the park...unless you have a top-notch real estate agent at your side. If you're looking for someone who will help you find the right lender, get pre-approved, and discuss all of your options, I'd love to take some time to chat with you.

If you're ready to get started, just give me a call today. I look forward to teaming up and helping you find the home of your dreams

Start Your Calculation


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