Here are some general comparisons between the types of loans offered through Community National Bank & Trust of Texas.

Fixed-Rate Mortgage
If you plan to stay in your home for a long period of time, a fixed-rate mortgage offers several advantages:

  • Monthly payments of principal and interest remain fixed for the life of your loan, e.g. 15 or 30 years.
  • Protects you from rising interest rates through the years.
  • Predictability allows you to budget more easily.
  • Typically means a lower monthly payment than on a shorter-term loan.
  • A fine option if you plan to stay in your home 5 to 7 years or more.

Adjustable-Rate Mortgage (ARM)
If you plan on selling your home or refinancing in the near future, ARMs provide advantageous flexibility:

  • Interest rate and monthly payments are initially lower and fixed for a period of 5 to 10 years, then adjust periodically.
  • Includes interest rate caps that limit how high your interest can go when the adjustment period begins.
  • Typically ARMs have a lower initial interest rate. If you expect future income growth, that flexibility could be a plus.
  • Loans can be set in a variety of longer terms.
  • Possibly your best option if you plan to sell or refinance in the near future.

Federal Housing Administration (FHA)
If you have limited funds to use toward a down payment or are looking for flexible credit guidelines, an FHA loan has positive features and benefits:

  • Open to all income levels.
  • Available in a variety of loan terms with mortgage insurance required.
  • Low down payment and closing cost options.
  • Allows a new buyer to take over the loan if you sell the home.
  • Co-applicant may help you qualify, even if they do not live in your home.
  • Sellers can pay up to 6% of sales price toward closing costs if they agree.

Veterans Affairs (VA)
If you are a qualified service member, financing for your primary residence through the VA offers special considerations:

  • Financing for eligible veterans, reservists, active-duty personnel.
  • Available in a wide range of loan terms and rates.
  • No monthly mortgage insurance required.
  • Low down payment, no down payment options.
  • Closing costs may come from gift or grant.
  • Sellers can pay all reasonable closing costs if they agree.

United States Department of Agriculture (USDA)
Rural Housing Loans

Looking to purchase a home in a rural area? A USDA loan promises great opportunities when you meet basic eligibility requirements:

  • Low to moderate household income, based on Area Median Family Income standards.
  • Home must be located in an eligible rural area as defined by USDA.
  • Modestly priced house for your own use as primary residence.
  • No required down payment, but you must be able to afford your mortgage payments including taxes and insurance.
  • You must be unable to obtain credit elsewhere, yet have an adequate credit history.
  • 100% financing possible.
  • 30-year fixed-rate loans only.
  • Program also available for the purchase and repair of an existing and/or newly constructed dwelling.
  • You must not already own a home.
  • Sellers can pay all reasonable closing costs if they agree.

CNB&T partners with the USDA in their commitment to the future of rural communities. The well organized USDA website can answer many of your questions about rural housing loans and your eligibility.