Mortgage Rate 101: Financing Your Dream Home

In recognition of National Homeownership Month, we want to help you understand all of your available financing options. If you’re worried about rising mortgage rates or you’re unsure whether you should choose a fixed-rate or adjustable-rate mortgage, we can help! Think of this blog as a course on the basics—Mortgage Rate 101. We’ll explain the different types of mortgages, talk about which may be the best option for you, and share how our team of experienced Mortgage Loan Officers and our 120 Day Rate Lock and Shop Program can get you in your dream home at the lowest rate.

Available Financing Options

Fixed-Rate Mortgage

The fixed-rate mortgage is the most common type of housing loan. It has a rate that is determined at the beginning of the mortgage term and does not change throughout the life of the loan. This option is optimal if you are ready to make a steady payment for an extended period of time. This loan type is beneficial if you plan on staying in the home for at least five years, as it provides stability and an assurance that the loan will not change.

Adjustable-Rate Mortgage

An adjustable-rate mortgage usually has a lower starting rate than a fixed-rate mortgage, but comes with the possibility of rate increases. Generally, this loan type is a solid alternative if you initially need smaller monthly payments or do not plan to stay in the current home for an extended period of time.

Alternative Options

Other financing options include government-insured loans, which offer a variety of low down payment options. We offer a special program for first time homebuyers whose household income is at a low to moderate income level. This is a great program for those that have limited down payment funds. Interested in building a home? We can finance those as well. While less common than fixed- and adjustable-rate options, we can explain the pros and cons of each and decide the best solution for you.

The 120 Day Rate Lock and Shop Program

Amid the current concern over rising interest rates, we have instituted a program to provide you with peace of mind. It’s as easy as lock, search, and relax! Our 120 Day Rate Lock and Shop Program can help you get pre-approved for your loan and lock in your interest rate for 120 days*.

During this time period, your rate will not increase, leaving you more time to focus on your home search. If interest rates decrease during your search, we have options for you to lower your rate. It’s a win-win situation. Contact us today to get pre-approved, lock in your rate, and get started on the search for your dream home today.

*Subject to credit approval, pre-approval with 120 day rate lock on a qualifying primary, single family, owner occupied or second home residence. Not available for all loan programs. Pre-approvals are subject to verification of credit, income, assets, and property approval. To guarantee 120 day rate lock, a qualifying property must be identified, and mortgage application submitted by the 75th calendar day from the date of the rate lock agreement. Rate lock terms are not guaranteed if: a. borrower changes loan products or terms, b. closing is delayed due to seller’s failure to close on time, c. borrower fails to meet contract requirements, d. closing is delayed due to a third party requirement, including appraisal and inspection, e. closing date is not included in the contract, or f. loan documentation or application contains fraudulent information. Cornerstone reserves the right to amend, terminate or withdraw this offer at any time without prior notice. Loans are subject to final credit approval.