Couple picturing room remodel
Mortgage Basics

Get informed now. Avoid surprises later.

Be prepared for big decisions


A mortgage loan is possibly the largest financial investment you’ll undertake. Reduce anxiety by understanding the fundamentals.

Most Popular Mortgage Types

  • Best for members who:

    Best for members who:

  • How it works

    How it works

  • Benefits

    Benefits

  • Risks

    Risks

  • Other considerations

    Other considerations

30 Year Fixed Rate

  • Best for members who:

    Plan to stay at least 6 to 7 years in the home

  • How it works

    Make the same monthly payment for 360 months

  • Benefits

    Lower monthly payment; rate stability over life of loan

  • Risks

    Not many - this is the most popular mortgage in America

  • Other considerations

    Home equity grows slowly in early years

15 Year Fixed Rate

  • Best for members who:

    Can afford a higher monthly payment

  • How it works

    Make the same monthly payment for 180 months

  • Benefits

    Lower interest rate significantly reduces total interest paid over life of loan

  • Risks

    Not many if the higher monthly payments work in the family budget

  • Other considerations

    Higher payments restrict spending in other areas

Adjustable Rate (ARM)

  • Best for members who:

    Plan to stay in home for no more than 3 years.

  • How it works

    After first year of loan, interest rate is adjusted to market conditions

  • Benefits

    Lower initial interest rate makes payments more affordable

  • Risks

    Interest rates & payments can jump year to year. Need to be sure future income will be sufficient

  • Other considerations

    Most ARM’s include a cap on the increase in any given year

Balloon Payment

  • Best for members who:

    Plan to sell home before final payment is due

  • How it works

    After a specified time, the total balance is due in a single ‘balloon’ payment.

  • Benefits

    Lower initial interest rate makes payments more affordable

  • Risks

    Property values fluctuate and you may not be able to sell or refinance on favorable terms

  • Other considerations

    Most risky mortgage option in an erratic economy

Before you attend that first open house...

Preparing for a mortgage

  1. Get prequalified by one or more prospective lenders. This allows you to focus on the correct price range and it will make you a more attractive buyer should there be a bidding situation.
  2. Review your credit report to make sure all entries are correct. Don’t give up if you’ve had past credit issues. Be ready to offer an explanation of how the situation has been corrected.

Get my Credit Report

couple shopping online

How much down payment do I need?

  • family on sofa with thumbs up

    Conventional Mortgage

    Typically 5 to 20%.
    Borrowers are required to buy mortgage insurance if their down payment is less than 20%.

  • family smiling together

    FHA Mortgage

    As low at 3.5%. Borrowers are required to buy mortgage insurance if their down payment is less than 20%.

  • marine standing proudly

    VA Mortgage

    0% down – a great thank you to those who have served.

How much mortgage can I afford?


A good rule of thumb is that your housing costs (mortgage + taxes + insurance) should not exceed 28% of your total pre-tax income.

For example:

  • Assume a monthly pre-tax income of $4,000
  • Multiply $4,000 by .28
  • The result is $1,120 monthly for housing costs.
  • Then use our How Much Home Can I Afford? calculator below

 

Mortgage Calculators

Recent Blog Posts

Painting Tools

Saving on Home Renovations

Does your kitchen look like it's straight out of 'That‘70s Show'? Do you still have avocado or harvest yellow tile? It’s time to remodel! These remodeling tips can save you big bucks! By focusing your remodeling, shopping for a contractor and choosing midgrade materials, you’ll save. Continue reading
Clothes lined up on store rack

Spending Less

How is it that, whenever you need new clothes, they’re at their most expensive? Of course it’s not sale season when you’re desperately in need of an all-new summer wardrobe because you just experienced a random growth spurt and none of your clothes fit you anymore. Continue reading

Learn more about home financing

Visit in person
Find a Location Near You
Online

Complete the Contact Form and we’ll get in touch.
Please don’t supply confidential information such as member number or password.

Call or Text

(325) 677-2274 – call or text
(800) 677-6770 – calls only