NYROC Financial Services, LLC is committed to integrity and impeccable customer service. Our goal is to bring our expertise to a broader market in order to help as many customers achieve their financial goals. We understand the unique challenges that home buyers, homeowners and Realtors face, especially in this difficult market.
Fixed Rate Conventional Mortgage
What is a Fixed Rate Mortgage?
A Fixed-rate mortgage is the most common mortgage for many homebuyers because the monthly payments are stable. The interest rate you lock-in will be the same interest rate you pay for the life of the loan. Terms of the mortgage can be personalized to fit your needs.
Term: 30 years Maximum Amount: $417,000
Benefits of a Fixed Rate mortgage
Inflation protection – If interest rates rise, your mortgage and your mortgage payment are fixed and won’t be significantly affected. Even if your taxes or insurance costs go up over time, your basic loan payment (principal and interest) will stay the same. This is especially helpful if you plan to own your home for five or more years. Long-term planning – You know what your monthly housing expense will be for the entire life of your mortgage. This can help you plan for other expenses and set long-term financial goals for you and your family. Low risk – You always know what your payment will be, regardless of what current interest rates are. This is why fixed-rate mortgages are so popular with first-time buyers. Your mortgage interest rate won’t go down, even if interest rates drop, unless you refinance your mortgage. Because the interest rate is usually higher than other types of mortgage loans, you may not qualify for as large of a fixed rate mortgage as you might with an adjustable. Your total monthly payment can occasionally increase based on changes to your taxes and insurance. In many cases you pay these costs through an escrow account that we establish for you.
Adjustable Rate Conventional Mortgage
What is an Adjustable Rate Mortgage?
An adjustable rate mortgage (ARM) is a mortgage whose rate changes at some pre-determined interval. The interest rate will be based on the combination of an index and margin. The index is the current market rate such as US Treasury Bill, Prime Rate or London Inter-Bank Offer Rate (LIBOR). The margin is a premium added to the index. Together, the index and margin comprise the interest rate quoted to the borrower. The index may vary up or down from one adjustment interval to another. The margin will remain the same for the life of the mortgage. Somewhere in the fine print will also be a term called mortgage floor. The floor is a rate the loan mortgage never fall below. There will also a term called cap. There will typically be two caps; an adjustment cap and a lifetime cap. The adjustment cap is the maximum amount the interest rate may adjust at any adjustment interval. The lifetime cap is a maximum interest rate the mortgage can never exceed regardless of adjustments.
Adjustable Rate Mortgage Features
You can select an ARM with a fixed-rate period of up to 10 years. The interest rate and your monthly payment stay the same during the fixed-rate period. After that, the interest rate adjusts (usually annually) based on a specific financial index — for example, one frequently used index is tied to the price of U.S. Treasury bills or securities. Another popular index is the London Interbank Offer Rate (LIBOR). In addition to the index, an additional percentage, known as a margin may be added to the index value to determine your interest rate at the time of adjustment. The rate moves up or down, depending on how interest rates have moved since you took out your loan. This means that when interest rates go up, your monthly mortgage payments may go up as well. On the other hand, when interest rates go down, your monthly mortgage payments may also go down. ARMs typically have an interest rate cap (or maximum) on the periodic adjustments and for the life of the loan. So, you know that your monthly payment can never increase above a certain amount. ARM’s fall into two main categories; amortizing and interest only. With an amortizing ARM, each payment includes principle and interest. With an interest only ARM, just interest payments are made during the interest only period.