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Types of Loans

Thirty-Year Fixed Rate Mortgage
The traditional 30-year 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 may be a better deal in the long run, because you can lock in the rate for the life of your loan.

Twenty-Year Fixed Rate Mortgage
This loan is fully amortized over a 20-year period and featres constant monthly payments. It offers all the advantages of the 30-year loan, plus a lower interest rate—and you'll own your home sooner. The disadvantage is that, with a 20-year loan, you commit to a higher monthly payment. Some borrowers opt for a 30-year fixed-rate loan and voluntarily make larger payments that will pay off their loan in 20 years. This approach is often safer than committing to a higher monthly payment, since the difference in interest rates isn't that great.  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 may be a better deal in the long run, because you can lock in the rate for the life of your loan.

Fifteen-Year Fixed Rate Mortgage
This loan is fully amortized over a 15-year period and features constant monthly payments. It offers all 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.

Ten-Year Fixed Rate Mortgage
This loan is fully amortized over a 10-year period and features constant monthly payments.  It offers all the advantages of the 15-year loan, plus a lower interest rate—and you'll own your home sooner. The disadvantage is that, with a 10-year loan, you commit to a higher monthly payment.

Adjustable Rate Mortgages (ARMs)
If you plan to stay in your home for shorter time periods, adjustable rate mortgages (ARMs) may help you minimize interest costs over the life of your loan.  Midland Federal Savings offers ARMs with interest rates and monthly loan payments that adjust annually after the first, third, or fifth year of your loan.

Annual Adjustable Rate Mortgage (1 year ARM)
This loan has an interest rate that changes once a year with limits on how much the interest rate can change in any single year and for the life of the loan.  The monthly loan payment is adjusted each year to reflect the new interest rate and properly amortize the loan over the loan term.

Hybrid ARM (3/1 ARM, 5/1 ARM)
These increasingly popular ARMS—also called 3/1 or 5/1—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 loan 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.

Home Equity Loans and Home Equity Lines of Credit
Home equity loans and home equity lines of credit allow you to use the equity in your home to pay for expenses such as home repairs and improvements, a car purchase, weddings, tuition, debt concolidation, or other large expenses you may have. Please contact us for more information.

Construction Loans and Home Improvement Loans
A construction loan or home improvement loan from Midland Federal Savings may provide you with the financing to build your dream home, update, or add on to your existing home. A construction loan is used to finance the building of a new home with a maturity date that is less than one year. The homeowner takes out a construction loan to cover the costs of the project before obtaining long-term funding.  A home improvement loan has a fixed interest rate and a fixed monthly payment for the loan term you select with available terms from 3 years up to 15 years. The interest rate varies with the loan term selected. To learn more please contact us.

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