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Loan Options

 

Conventional Fixed-Rate Mortgage – With a conventional fixed-rate mortgage, you have the comfort of knowing your interest rate remains the same for the entire life of the loan. This is the most popular mortgage option due to the stability of payments, but requires at least a 5% down payment.

Advantages:

  • Competitive long-term rates
  • Rate remains the same throughout life of loan
  • Fixed Principal and Interest payments throughout
  • life of loan (taxes and interest portion can fluctuate)
  • No pre-payment penalties
  • Uwharrie Bank will service loan
  • Primary residence, second home and investment
  • property eligible
  • Allows for closing costs to come from a gift or seller

Considerations:

  • Should rates decrease during the term of your
  • mortgage, you will need to refinance to take advantage
  • of the lower rates
  • Private Mortgage Insurance (PMI) may be added to
  • monthly payment if one does not have 20% down
  • payment of purchase price or appraised value,
  • whichever is less

 

USDA Mortgage – A USDA Rural Development Single Family Housing Guaranteed Loan Program offers 100% financing with no down payment required. This mortgage program is becoming more popular by assisting low to moderate income families achieve their dream of home ownership.

Advantages:

  • 100% financing with no down payment
  • Competitive long-term rates
  • Rate remains the same throughout life of loan
  • No pre-payment penalties
  • Allows for closing costs to come from a gift or seller

Considerations:

  • Borrower must meet credit and household income
  • requirements
  • Property must be located in eligible location as
  • determined by USDA

 

FHA Mortgage – A Federal Housing Administration (FHA) loan is a good option for borrowers with limited equity or money for a down payment and closing costs.

Advantages:

  • Available for all income levels
  • Requires just 3.5% down payment
  • Allows for co-applicant to help borrower
  • qualify, even if not living in the home
  • Fixed-rate and adjustable-rate loan options
  • Allows for closing costs to come from a gift or seller

Considerations:

  • Typically only allowed one FHA mortgage at a time
  • Typically pay FHA mortgage insurance premiums 
  • for the entire term of the loan

 

VA Mortgage – Veterans and service members who dedicate themselves to our country can benefit from a mortgage with the Department of Veterans Affairs (VA) loan program. The government insured loans are favorable due to no down payment options.

Advantages:

  • Financing available for qualified veterans,
  • reservists, active duty personnel or eligible
  • family members
  • Fixed-rate and adjustable-rate options
  • available
  • Allows for closing costs to come from a gift
  • or seller
  • Does not require monthly mortgage insurance
  • 100% loan – no down payment
  • One-time VA funding fee waived if receiving
  • service-related benefits

Considerations:

  • Typically includes a one-time VA funding fee
  • that can be financed into the loan amount
  • Financing available for primary residence only

 

Adjustable Rate Mortgage – Whether you are looking for a “starter home”, larger home, or simply have plans to move in a few years, an adjustable-rate mortgage (ARM) from Uwharrie Bank offers you flexibility and savings options.

Advantages:

  • Initial interest rates are typically lower than
  • fixed-rate mortgages
  • Lower initial start rate may provide
  • additional borrowing power
  • Interest rates are set for 5 year periods at a
  • time, unlike most traditional ARMs that
  • adjust annually after the introductory period
  • Uwharrie Bank will service loan

Considerations:

  • Payments may change and increase
  • substantially
  • Our mortgage specialists can help navigate
  • possible changes and outcomes associated
  • with an ARM

 

A Uwharrie Bank residential lending specialist can help you determine which loan program best meets your needs.  With any mortgage, it would benefit you to create a budget so you know how much of a monthly payment you can afford.

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