Affordable Mortgage Strategies to Overcome Rising Rates

Over the past year, many consumers have put their dreams of home ownership on hold due to fluctuating mortgage rates. But here’s the thing: rates are just a small piece of the puzzle when it comes to an affordable mortgage. At First Bank Home Loans, we’re committed to helping you navigate the market and achieve your homeownership goals, regardless of rate fluctuations. Here are some strategies we offer to make your mortgage affordable right NOW:

2/1 Buydown

Ever heard of a 2/1 Buydown? It’s a savvy strategy that can give you a lower rate for the first two years of your mortgage term. Lock in your interest rate and benefit from a 2% reduction in the first year, followed by a 1% reduction in the second. After two years, your rate reverts to the fixed note rate, but if the market offers better rates before then, you have the opportunity to refinance. This upfront reduction in interest is made possible because either the seller, home builder, or buyer covers the lender fees. Keep an eye out for sellers or builders offering this option or make it a condition when negotiating your offer.

5/1 Adjustable Rate Mortgage (ARM)

Another option worth considering is a 5/1 Adjustable Rate Mortgage (ARM). With this type of mortgage, you enjoy a lower fixed rate for the first five years of the loan term, after which the rate adjusts annually. It’s an ideal choice if you don’t plan to stay in your home for more than five years. Plus, it offers the flexibility to refinance before the rate adjusts. As long as rates decrease within the initial five years, you won’t be stuck with a higher rate long-term.

Down Payment Assistance

Struggling to come up with a hefty down payment? We’ve got you covered. Our down payment assistance programs provide loans or grants covering three to five percent of your home’s purchase price. This means you won’t need a full out-of-pocket down payment, making homeownership more accessible. And here’s the best part: these loans are forgivable after a certain period, provided you meet the criteria set by our partnered programs. You may additionally qualify for Homeownership Assistance.

VA Loans

For our military customers, we’re proud to offer VA Loans backed by the federal government. These loans come with attractive benefits such as no down payment requirements or lower credit score thresholds. VA Loans cover various mortgage types, including conventional loans, refinanced loans, jumbo loans, and more. With better interest rates than many other mortgage options, VA Loans are a smart choice for those who’ve served our country.

At First Bank, we’re dedicated to making homeownership a reality for everyone, regardless of current rate trends. Don’t let rising rates put your dreams on hold. Let’s work together to find the affordable mortgage solution that’s right for you.

All loans subject to credit approval. Rate and APR may increase after consummation.