Here at Ascent, we offer many options when it comes to home loans, both in-house and secondary market. Let’s discuss the differences between them.
In-House
Loans that we originate and keep here at the credit union. All your payments will be here and any service you need will be by our employees.
Our in-house loans include conventional mortgages up to 15 years, balloon mortgages, fixed rate home equity (or second mortgages), home equity lines of credit, investment property mortgages for non-primary residences, and jumbo loan mortgages.
A conventional mortgage is calculated with even payments (called amortization) that allow the loan to pay off completely at the end of the term. Our in-house mortgages go up to 15 years.
A balloon mortgage is amortized over 30 years, allowing your payment to be lower. However, with a balloon, your entire loan amount comes due at a chosen time, usually between 5 and 15 years. The benefit of the balloon payment mortgage is that the payment is usually less due to the longer amortization. Most borrowers will refinance or sell the mortgage before the balloon payment is due.
Secondary Market
Loans that we originate here, meaning you apply with us and work with us to get the loan, but after the loan closes, we give the loan to one of our partners to service it. You will make payments to them and contact them for any needs that arise for the life of the loan. These partnerships allow us to offer the same competitive products and rates as any other lender, whether they be a financial institution or a broker.
The secondary market loans include conventional mortgages up to 30 years, adjustable-rate mortgages, VA mortgages, FHA mortgages, and a variety of conforming and non-conforming loans, including investment loans.
An adjustable-rate mortgage, also known as an ARM, is a home loan with an interest rate that changes as the prime rate goes up and down. This means the monthly payments can go up or down as well.
VA mortgages are only for Veterans and qualifying spouses. They are backed, meaning insured, by the U.S. Department of Veteran Affairs.
FHA mortgages are backed by the federal government and come with more flexible financial requirements, such as higher debt limits and lower credit scores are allowed. Both types of mortgages require the borrower to qualify under the individual program guidelines.
With so many options and factors that qualify individuals for loans, it’s best to sit down with one of our mortgage experts and discuss the various options, including their different down payment amounts, rates, closing costs and other factors. Our experts can talk about the benefits of each type of mortgage so we can make sure you are getting the loan that fits you best.
Give our mortgage experts a call at 801-399-9728 or click here to learn more.