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Types of Loans

Thirty-Year Fixed Rate Mortgage
The traditional 30-year fixed-rate mortgage has a constant interest rate and monthly payments that never change. This may be a good choice if you plan to stay in your home for seven years or longer. If you plan to move within seven years, then adjustable-rate loans are usually cheaper. As a rule of thumb, it may be harder to qualify for fixed-rate loans than for adjustable rate loans. When interest rates are low, fixed-rate loans are generally not that much more expensive than adjustable-rate mortgages and may be a better deal in the long run, because you can lock in the rate for the life of your loan.

Fifteen-Year Fixed Rate Mortgage
This loan is fully amortized over a 15-year period and features constant monthly payments. It offers all the advantages of the 30-year loan, plus a lower interest rate—and you'll own your home twice as fast. The disadvantage is that, with a 15-year loan, you commit to a higher monthly payment. Many borrowers opt for a 30-year fixed-rate loan and voluntarily make larger payments that will pay off their loan in 15 years. This approach is often safer than committing to a higher monthly payment, since the difference in interest rates isn't that great.

Adjustable Rate Mortgages (ARM)
ARM interest rates are subject to potential increases over the life of the loan, once the initial fixed-rate period expires. ARM offer fixed interest rates for initial periods of the loan, after which your interest rate and monthly payment may increase. Thereafter APR and payments will change annually and may increase for the remaining life of the loan.

Hybrid ARM (3/1 ARM, 5/1 ARM, 7/1 ARM, 10/1 ARM)
These increasingly popular ARMS—also called 3/1, 5/1, 7/1 or 10/1—can offer the best of both worlds: lower interest rates (like ARMs) and a fixed payment for a longer period of time than most adjustable rate loans. For example, a "5/1 loan" has a fixed monthly payment and interest for the first five years and then turns into a traditional adjustable-rate loan, based on then-current rates for the remaining 25 years. It's a good choice for people who expect to move (or refinance) before or shortly after the adjustment occurs.

CHFA Fixed Rate Mortgage
The Connecticut Housing Finance Authority (CHFA) offers low rate first mortgages to help low and moderate income residents purchase a home. Up to 100% financing of the mortgage, down payment assistance, and closing costs is available for eligible borrowers. Properties in Connecticut only.

 

Fairfield County Bank
150 Danbury Road, Ridgefield, CT  06877
Toll Free:  (877) 431-7431
Toll Free:  (800) 776-6518
loans@fairfieldcountybank.com
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NMLS ID # 516624
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