Mortgage Loan Types

Couple discussing mortgage loan types

A mortgage loan to suit your needs.

Linn Area Credit Union offers a variety of mortgage loan options to meet your needs. Our mortgage specialists will work with you to help determine the type of mortgage that’s right for your individual situation. There’s a lot to consider when buying a home, and we’re here to help you through it all! When you’re ready to learn more, contact us for a free consultation!

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Conventional Mortgage Loans

A conventional mortgage is a common way to finance a home. You can put down as little as 3%, or you could put 20% down to avoid paying Private Mortgage Insurance (PMI). Conventional loans are available at fixed or adjustable rates.

Fixed-Rate Mortgage Loans
Traditionally, this is the most popular type of mortgage. Once you lock into an interest rate, that interest rate stays the same across the life of the loan. We offer 30-, 20-, 15- and 10-year terms at fixed rates. A 30-year term offers the most affordable fixed-rate payment option. It’s ideal if you plan to remain in your home for several years. With a 20-, 15-, or 10-year term, you’ll get a lower interest rate and build equity in your home faster.

Adjustable-Rate Mortgage (ARM) Loans
With an adjustable-rate mortgage, the interest rate may change over time. ARMs are expressed using two numbers, i.e., a 7/1 ARM. The first number indicates the number of years the rate is fixed, and the second number represents how often the rate may change after the initial fixed rate. So, for a 7/1 ARM, the rate is fixed for seven years and then has the potential to change every year after that. Linn Area offers a variety of ARM loans, including 5/5, 3/1, 5/1, 7/1, and 10/1 terms.

So, what’s the benefit of an adjustable-rate mortgage loan? Well, you get a lower initial interest rate than you would with a fixed-rate mortgage, which allows for a lower monthly payment during the initial term. This comes in handy if you plan to re-sell the home in the short run or if you anticipate your income will increase over time.

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100% Financing Mortgage Loans (No down payment… woot!)

Did you know you can get into a home with no money down? Well, you can… with our unique 100% financing option! These loans are great for anyone who wants to purchase their first home, but has zero moola for a down payment. Typically, we set you up with two mortgage loans: the first mortgage loan will be a 30-year loan that covers 80% of the total cost, and the second mortgage loan will take care of the final 20%. You’ll have no PMI payments to make, and you’ll be fully financed!

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Federal Housing Administration (FHA) Loans

FHA loans are popular — especially among first time home buyers! — because they allow for lower down payments. You may qualify for an FHA loan with a down payment as low as 3.5%. (A credit score of 620 is not necessarily a deal breaker!)

If you’ve had a rocky relationship with money, you may still qualify for an FHA loan. The downside is that you must pay an upfront mortgage insurance premium, as well as an annual premium that is charged monthly. (Never fear! Both of these mortgage insurance payments may be rolled into the mortgage.)

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United States Department of Agriculture (USDA) Rural Development Home Loans

If you’re looking to purchase or refinance a home in a rural area, you may want to look into a USDA Rural Development home loan. The USDA sets maximum income limits for each county; to qualify for this loan, your income must fall under the limit for the county where the property is located. The USDA also defines what it means by a “rural area,” so you’ll have to make sure the property you’re buying lies in a qualifying zone.

Yep, there are guidelines to meet, but the good news is: No down payment is required! (Which makes it totally worth it!)

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Veterans Affairs (VA) Home Loans

We partner with the U.S. Department of Veterans Affairs to help service-members, veterans, and eligible surviving spouses become homeowners. You can purchase a home at a competitive interest rate, often without a down payment or private mortgage insurance. The VA guarantees a portion of the home loan, which lets us provide you with more favorable terms. (Yes!)

So if you currently serve in the military, the National Guard or reserves, or are a veteran, you should definitely talk to us about this option. (And we thank you for your service!)

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Rates, terms and conditions subject to change and may vary based on qualifications, including creditworthiness, loan-to-value ratio and collateral conditions.
When was the last time you refinanced your home? Were interest rates lower or higher? If you don’t know, then you should take a look at your mortgage paperwork. It might be totally worth your while! My interest (pun intended!)…
You have better things to do than drive to a branch to apply for a loan. (But if you’re looking for a reason to come visit us, this would be a good one. We can catch up!) We know how…