Mortgage Loan Types
30-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 may be cheaper. 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.
20-Year Fixed Rate Mortgage
This loan is fully amortized over a 20-year period and features constant monthly payments. It offers all the advantages of the 30-year loan, plus a lower interest rate. Many borrowers opt for a 30-year fixed-rate loan and voluntarily make larger payments that will pay off your loan in 20 years. This approach combines the benefit of a shorter term with the flexibility to adjust the payment, if needed, and may provide a better alternative to committing to a higher monthly payment for the entire loan term.
15-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 combines the benefit of a shorter term with the flexibility to adjust the payment, if needed, and may provide a better alternative to committing to a higher monthly payment for the entire loan term.
10-Year Fixed Rate Mortgage
10-Year Fixed Rate Mortgage products are also available. This loan is fully amortized over a 10-year period and features constant monthly payments. It offers all of 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 10-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 10 years. This approach is often safer than committing to a higher monthly payment.
FHA Fixed Rate Mortgage
(Insured by the Federal Housing Administration)
This loan is fully amortized over a 15- or 30-year period and features constant monthly payments. It offers an option with a lower down payment.
Adjustable Rate Mortgage (ARM)
(5/1 ARM, 7/1 ARM and 10/1 ARM)
These ARMs — also called 5/1, 7/1 or 10/1 — can offer the best of both worlds: lower interest rates (like ARMs) and a fixed payment for a longer period of time than 1-year adjustable rate loans. For example, a "5/1 loan" has a fixed monthly payment and interest for the first five years and then the rate begins to adjust annually just as it would in 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.
Construction Loan
Paying for new home construction occurs in two distinct stages, and we service both with distinct loan products: Construction Loans and End Loans.
First, you’ll need a Construction Loan to cover the labor and materials and the land, if needed. You can finance as much as $2 million over a 12-month loan term – with the option to double that timeframe as needed. You’ll pay only the interest on disbursed funds during construction. Land owners can even use the equity as a down payment for the Construction Loan. Some programs offer an option to lock in permanent financing – or End Loan -- for 12 months at no additional cost.
You’ll still need an End Loan – or mortgage – to finalize the home sale, and both can be handled by our team in-house. Ask your mortgage banker about which mortgage loan types listed above qualify as an End Loan.
VA Fixed Rate Mortgage
(Guaranteed by the Department of Veterans Affairs, if eligible)
This loan is fully amortized over a 15- or 30-year period and features constant monthly payments. This program is for Service Members and Veterans.
USDA Loans
Guaranteed by the U.S. Department of Agriculture, if eligible*
The USDA’s loan program allows homebuyers to achieve up to 100% financing at a lower-than-market interest rate. Low 0.35% annual fee doesn’t change based on down payment, unlike conventional mortgage insurance. The annual fee is broken down into 12 monthly payments.
Flexible credit guidelines allow eligible borrowers with blemished or limited credit histories to qualify for home financing on primary residences in eligible rural areas.
To determine if your property might be eligible, visit https://eligibility.sc.egov.usda.gov/eligibility/
* Borrowers are subject to eligibility requirements, which include income, property, credit and location.
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 may be cheaper. 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.
20-Year Fixed Rate Mortgage
This loan is fully amortized over a 20-year period and features constant monthly payments. It offers all the advantages of the 30-year loan, plus a lower interest rate. Many borrowers opt for a 30-year fixed-rate loan and voluntarily make larger payments that will pay off your loan in 20 years. This approach combines the benefit of a shorter term with the flexibility to adjust the payment, if needed, and may provide a better alternative to committing to a higher monthly payment for the entire loan term.
15-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 combines the benefit of a shorter term with the flexibility to adjust the payment, if needed, and may provide a better alternative to committing to a higher monthly payment for the entire loan term.
10-Year Fixed Rate Mortgage
10-Year Fixed Rate Mortgage products are also available. This loan is fully amortized over a 10-year period and features constant monthly payments. It offers all of 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 10-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 10 years. This approach is often safer than committing to a higher monthly payment.
FHA Fixed Rate Mortgage
(Insured by the Federal Housing Administration)
This loan is fully amortized over a 15- or 30-year period and features constant monthly payments. It offers an option with a lower down payment.
Adjustable Rate Mortgage (ARM)
(5/1 ARM, 7/1 ARM and 10/1 ARM)
These ARMs — also called 5/1, 7/1 or 10/1 — can offer the best of both worlds: lower interest rates (like ARMs) and a fixed payment for a longer period of time than 1-year adjustable rate loans. For example, a "5/1 loan" has a fixed monthly payment and interest for the first five years and then the rate begins to adjust annually just as it would in 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.
Construction Loan
Paying for new home construction occurs in two distinct stages, and we service both with distinct loan products: Construction Loans and End Loans.
First, you’ll need a Construction Loan to cover the labor and materials and the land, if needed. You can finance as much as $2 million over a 12-month loan term – with the option to double that timeframe as needed. You’ll pay only the interest on disbursed funds during construction. Land owners can even use the equity as a down payment for the Construction Loan. Some programs offer an option to lock in permanent financing – or End Loan -- for 12 months at no additional cost.
You’ll still need an End Loan – or mortgage – to finalize the home sale, and both can be handled by our team in-house. Ask your mortgage banker about which mortgage loan types listed above qualify as an End Loan.
VA Fixed Rate Mortgage
(Guaranteed by the Department of Veterans Affairs, if eligible)
This loan is fully amortized over a 15- or 30-year period and features constant monthly payments. This program is for Service Members and Veterans.
USDA Loans
Guaranteed by the U.S. Department of Agriculture, if eligible*
The USDA’s loan program allows homebuyers to achieve up to 100% financing at a lower-than-market interest rate. Low 0.35% annual fee doesn’t change based on down payment, unlike conventional mortgage insurance. The annual fee is broken down into 12 monthly payments.
Flexible credit guidelines allow eligible borrowers with blemished or limited credit histories to qualify for home financing on primary residences in eligible rural areas.
To determine if your property might be eligible, visit https://eligibility.sc.egov.usda.gov/eligibility/
* Borrowers are subject to eligibility requirements, which include income, property, credit and location.
Disclosure
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Commerce Bank Mortgage supports the markets and communities within our geographic regions and reserves the right to limit the geographic area in which loans will be made. Commerce lends in Missouri, Kansas, Illinois, Oklahoma and Colorado.
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