Mortgages & Rates

How Do Adjustable Rate Mortgages Work? 

Your interest rate is fixed for a specific period. After that, your interest rate may change annually depending on the market. That means your monthly mortgage payment can go up or down each year. Your rate won’t increase more than 5% of the original rate throughout the life of the loan.

Popular Adjustable Rate Options

• A popular option is a 5/1 Adjustable Rate Mortgage, or ARM where your interest rate is fixed for 5 years.
• FHA offers an ARM option.
• Qualified veterans, service members and spouses can eligible for an ARM with a VA loan.

How Do You Save with an Adjustable Rate Mortgage?

Your starting interest rate is typically lower than other kinds of loans

• Today’s low interest rate for a 5/1 ARM is 3.99% (4.964% APR).
• Monthly mortgage payments are more affordable during the first years.
• Down payments can be as low at 5% on a home loan purchase.
• Refinance up to 95% of your current home’s value.

*Rates, terms and fees as of and are subject to change without notice. The ARM interest rate and monthly payment are subject to change after the fixed five-year period. Contact us for more information.

Benefits of an FHA Mortgage

• You can qualify with a lower credit score compared to other loans. 
• You can buy a home with a down payment as low as 3.5%. 
• If you already have an FHA loan, refinance with FHA Streamline to lower your interest rate. 
• You may qualify even if you’ve had financial difficulties in the past, like a bankruptcy. 
• You may be able to roll your closing costs into your loan.

How Do VA Mortgages Work

When you apply for a VA loan, we’ll want to make sure you have sufficient income and that you’re eligible for this type of loan. If your situation meets the VA’s guidelines for type and length of service, they’ll issue a Certificate of Eligibility to confirm you’re eligible. If you haven’t already, we’ll apply for your Certificate of Eligibility to save you some time.

To qualify for a VA loan with Tioga Franklin Savings Banks, we recommend having a credit score of at least 620 and a debt-to-income ratio no more than 50%.

Benefits of a VA Mortgage

Most veterans and service members won’t need a down payment.
You can qualify with a lower credit score and more debt compared to conventional loans.
If you already have a VA loan, you can refinance up to 120% of your home’s value. Keep in mind that if you’re taking cash out of your current VA loan, you can only borrow up to 100% of your home’s value.

Benefits of a USDA Loan

• You can buy a home with no down payment.
• You can qualify with a credit score as low as 620.
• Your guarantee fees may be lower than FHA mortgage insurance premiums.

Benefits of a Jumbo Loan 

• Interest rates for jumbo loans are typically lower than conventional loans. 
• Choose between a fixed or adjustable interest rate for all jumbo loans.
• Need more lenient down payment and credit requirements? See if you qualify for a jumbo FHA loan. 
• Veterans and service members who qualify for a jumbo VA loan can often buy a home with a much lower down payment compared to other loans. 

Conventional mortgage or conventional loan is any type of home buyer’s loan that is not offered or secured by a government entity. Instead, conventional mortgages are available through private lenders, such as banks, credit unions, and mortgage companies. However, some conventional mortgages can be guaranteed by two government-sponsored enterprises; the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).