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News & Tips

Which Type of Mortgage is Best for Me?

octubre 22, 2020 by Space Coast Credit Union

Finding the right mortgage for yourself can feel like an overwhelming task. Whether you're a first-time homebuyer, moving up, or downsizing, SCCU offers a variety of mortgage options for your home purchase. By the end of this guide, you will have a clearer understanding of the different types of mortgages and be able to narrow down which mortgage type may be best suited for you.

Conventional Fixed-Rate Loan – A conventional fixed-rate home loan is the most common type of mortgage for financing a home. The interest rate is fixed at the beginning and remains constant throughout the life of the loan. This loan may suit your needs best if you:
  • Want to have the security of making a consistent payment amount month-to-month
  • Plan to stay in your home long term, generally five years or more

No Closing Costs Mortgage – A no closing costs option greatly reduces the amount of money you need at closing because it covers your third-party charges and waives lender origination fees. You’ll still have a down payment and need money for prepaid reserves (such as property taxes, homeowners insurance, and prepaid interest), but this is a great option if you want to bring less money to closing. Your interest rate will be slightly higher, but there's no prepayment penalty or hidden restrictions. SCCU’s No Closing Costs option is available on several of our mortgage types; ask your Express Mortgage Originator for details and options. This option may suit your financial needs best if you:
  • Want or need to bring less money to closing
  • Are a first-time homebuyer

Adjustable-Rate Mortgage - An adjustable-rate mortgage—also referred to as an ARM or variable-rate mortgage—is a loan that has an interest rate that can go down or up. Typically, the loan starts with an interest rate that's lower than the interest rate on a similar fixed-rate mortgage for a specified time period. When that period of time expires, the interest rate may change, which will affect the amount of your monthly payment. This loan may suit your financial needs best if you:
  • Need a lower interest rate and payment now
  • Plan to only stay in your home a few years, generally less than five years
  • Your income is likely to increase enough to comfortably make higher monthly payments should your ARM interest rate increase
  • Can withstand yearly fluctuations in your mortgage rate and monthly payment

Jumbo Home Loan - A jumbo home loan allows you to finance your once-in-a-lifetime home and enjoy the luxuries of Florida - whether it be waterfront living, tropical estates, or a bird’s eye view of the city. This loan may suit your financial needs best if you:
  • Are considering a home with a purchase price of $548,250 or higher
  • Are looking for a higher loan amount with a competitive interest rate

FHA Loan - Unlike conventional loans, FHA loans are backed by the Federal Housing Administration, which is the world's largest mortgage insurer. The FHA backs lenders should the borrower default on the mortgage, but it does not lend money. This loan may suit your financial needs best if you:
  • Are purchasing your first home
  • Have less than perfect credit
  • Need a smaller down payment option
  • Need expanded, co-borrower options

VA Home Loan – As part of the GI Bill of 1944, our nation's veterans, widowed military spouses, and active duty service members can apply for a VA home loan to purchase a home. The program is designed to make it easier for qualified purchasers to gain the benefits of homeownership. This loan may suit your financial needs best if you:
  • Are an active duty service member, veteran, or an eligible family member
  • Are needing to finance up to 100% of the loan
  • Have a lower credit score
  • Have a higher debt-to-income ratio

Construction Loan – When you're building a brand-new home, a construction loan is used to pay the home builder. With a construction loan in place, your lender makes payments to the builder in increments as each stage of construction work is completed. At the end of construction, your SCCU construction loan will roll into the standard mortgage that you chose before construction began. This loan may suit your financial needs best if you:
  • Are planning to have your home built
  • Desire the convenience of a seamless loan from construction to move-in (one closing, and no refinancing)

Condo Loan – The mortgages listed above are typically for single-family homes. If you’re looking to purchase a Florida condominium, lenders usually have special requirements of the condo property and association. These guidelines are addressed with a special condo loan. This loan may suit your financial needs best if you:
  • Desire the carefree convenience of condo living
  • Are considering a condo as a second or vacation home

Space Coast Credit Union offers many types of mortgages for every type of homebuyer.1 Keep in mind, our No Closing Costs option is available on several of our mortgages; make sure to ask about your options. Another benefit to consider when choosing an SCCU mortgage is that there are no pre-payment penalties on any of our mortgages; so you can pay additional amounts toward the principal each month and pay off your loan faster without penalty.

Call us at 800-447-7228 to speak with a Team Member in Express Mortgages today for a personalized look into which mortgage type is best for you.

Have more questions about purchasing a home? Visit our Home Buying Center for information on estimating your mortgage payment, requesting a consultation, and getting pre-approved today!

1HOME LOANS: Mortgage loans are originated by Space Coast Credit Union, and are subject to credit approval, verification and collateral evaluation. Programs, offers, rates, terms, and conditions are subject to change or cancellation without notice. Certain conditions apply. See additional disclosures15
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