There are several different types of home loans, and the licensed mortgage loan originators at Cliffco Mortgage Bankers can help answer any and all questions about each of them.

30-Year, Fixed-Rate Mortgage

The traditional 30-year, a 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 might be a better deal in the long run because you can lock in the rate for the life of your loan.

15-Year, Fixed-Rate Mortgage

This loan is fully amortized over a 15-year period and features constant monthly payments. It offers all of 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.

Hybrid ARM (3/1 ARM, 5/1 ARM, 7/1 ARM)

These increasingly popular ARMS (also called 3/1, 5/1 or 7/1) 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.

Adjustable-Rate Mortgages (ARM)

When it comes to ARMs there’s a basic rule to remember: the longer you ask the lender to charge you a specific rate, the more expensive the loan is.

2/1 Buydown Mortgage

The 2/1 buydown mortgage allows the borrower to qualify at below market rates so they can borrow more. The initial starting interest rate increases by one percent at the end of the first year and adjusts again by another one percent at the end of the second year. It then remains at a fixed interest rate for the remainder of the loan term. Borrowers often refinance at the end of the second year to obtain the best long-term rates. However, keeping the loan in place even for three full years or more will keep their average interest rate in line with the original market conditions.

Annual ARM

This loan has a rate that’s recalculated once a year.

Monthly ARM

The interest rate is recalculated every month with this loan. Compared to other options, the rate is usually lower on this ARM because the lender is only committing to a rate for a month at a time, so his vulnerability is significantly reduced.

Call Cliffco, your Long Island mortgage banker, today at (516) 408-7300 or email us at to get started. We are licensed in New York, New Jersey, Pennsylvania, Connecticut, Florida, Texas and the US Virgin Islands. Our loan experts can help you achieve your dream of home ownership, and walk you through the process of how to get a mortgage loan.