What Type of Mortgage is right for you?


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When it comes to buying a home, most people  know there are a few different mortgage options to choose from, but many don’t understand that there are actually quite a few options that vary depending on your situation. Once you’ve taken care of the homework – setting a budget, figuring out a down payment, and reviewing your credit, you’ll have a better idea of what loan works best for your needs.

Here are the most common types of mortgage options:

Fixed Rate – This is your standard run of the mill mortgage and is often referred to as a conventional mortgage. They are consistent meaning the monthly payments won’t change over the life of your loan due to interest rates. They are typically available in 10, 15, 20, and 30-year loan periods with 15 and 30 year being the most common.

Adjustable Rate – With this type of mortgage your interest rate will change over time. You will typically have a low  rate at the beginning of the term, and the rate will adjust as the interest rate environment changes. If you plan to own a home for a short period of time, this may be a good option. There are usually several adjustable rate options to choose from.

Interest Only (Equity Line) – These loans give you the option, during the first 5 or 10 years, to pay only the interest portion of your monthly payment instead of the full payment, although you can pay on the principal as well if you choose. This slows down your repayment time but can be useful if you need funds for something else. Afterward, the rest of the mortgage is paid off in full like a conventional mortgage.

FHA – These mortgages are backed by the Federal Housing Authority. They can be a great option for first-time home buyers or those with bad credit. FHA loans can be used for single-family homes, cooperative housing projects, some multifamily homes, and condominiums. They come with built-in mortgage insurance to protect against the possibility of not being able to repay the loan. The required down payments are smaller with these loans.

USDA – These loans are back by the United States Department of Agriculture and similar to FHA loans, they can be a good option for people with not great credit, who don’t have a large down payment, and are looking to live in qualifying rural towns.

VA – The Department of Veterans Affairs backs these zero down loans for active duty, reserve, national guard, and veteran members of any branch of the armed forces.

Construction – A construction loan is typically a loan used to build a new home or add on/renovate an existing home.  As you build your house, the lender pays out the money in stages. Rates are typically higher than a conventional mortgage and may fluctuate with the market. To gain approval, the lender will need to see a construction schedule with detailed plans & specs, and a realistic budget. Some lenders, like Litchfield Bancorp, can also include the financing of the land in the construction loan and automatically roll your construction loan into a long-term fixed rate mortgage. There are typically several different options available to fit your needs.

Homes are major investments, often the biggest you’ll ever make. Whether you’re buying or building Litchfield Bancorp has affordable and easy ways to get you the financing dollars you need. You also work directly with decision makers. No red tape, no hassles. Stop into one of our 5 convenient locations or contact one of our home loan specialists today to review your options.  


Jennifer Ives-Groebl
Vice President, Senior Mortgage Lender
NMLS MLO ID: 532621

Author: Jennifer Ives-Groebl

Jennifer has been with Litchfield Bancorp since 1994 and was promoted to Assistant Vice President and Senior Mortgage Originator shortly after graduating the Connecticut School of Finance & Management in 1998. Stationed in both our Torrington and Litchfield locations, Jennifer is well known and respected in the local residential real estate community and recognized as a resource for some of the more difficult transactions. Jennifer resides in Torrington and is actively involved in the local community. She is a long time member of the Torrington/Winsted Rotary club and is currently serving as its Assistant Treasurer. Jennifer is involved with Litchfield County Board of Realtors and serves as chair of the Audit Committee and a member of the Public Relations Committee. She is also a member of the Fuessenich Park Partnership; and through Education Connection, has participated in the Mentoring Program.