Choosing a home is one of the biggest decisions you’ll make in your life, but selecting the right mortgage loan to pay for it can be just as critical. It can save you thousands of dollars a year, leaving more money for savings and other investments and helping you get the most out of your purchase. Most loans fall into two categories—fixed-rate and adjustable-rate mortgages—each of which is suited to different circumstances.

Fixed-Rate

With a fixed-rate mortgage loan, your interest rate is locked in when you sign and won’t rise or fall, regardless of how the economy is doing. Because you can be certain what your housing payments are going to be from one year to the next, a fixed-rate loan can make long-term budgeting and financial planning a lot easier. Fixed-rate loans are also easy to understand, so they’re a good option for first-time homebuyers or those who plan to stay in the property for several years. 

Adjustable-Rate

Unlike fixed-rate, the interest rate on an adjustable-rate mortgage loan is tied to a broader financial index, which fluctuates along with various market conditions. While the introductory interest rate may be a lot lower, your monthly payment could skyrocket in a few months or a couple of years if the economy is doing well. If you plan to sell the house after a couple of years or have the financial resources to cope with a higher monthly payment, an adjustable-rate mortgage loan could be perfect.

Putnam 1st Mercantile Bank is dedicated to providing borrowers and house hunters throughout Cookeville, TN, with personalized service, tailored to your needs. Whether you’re opening a checking account or looking for a mortgage loan, you can depend on their team to help you meet all of life’s challenges. To find your nearest location, visit their website now, or call (931) 528-6372 to start the mortgage application process today.