Breaking Down Your Mortgage

Fixed-Rate vs Adjustable-Rate Mortgages

Almost all home loans fall into two categories: fixed-rate or adjustable-rate. The rate refers to the interest rate on the loan. When shopping for a mortgage, you should first determine which of these two types best suits your needs.

A fixed-rate mortgage provides you with the security of consistent monthly payments over the life of your loan, making budgeting simple. With an adjustable-rate mortgage, your initial interest rate is typically lower than a conventional fixed-rate loan. Though initial rates are often lower, the interest rate can change periodically, and the monthly payment will go up or down accordingly. Adjustable rate mortgage products have interest rates that may increase after consummation.

Fixed-Rate Mortgage (FRM)

• Interest rate is fixed for the life of the loan
• Most often used by homebuyers who expect long term ownership of the home
• Monthly principal and interest payments remain the same for the life of the loan
• No prepayment penalties for partial or full payment before the maturity date

Adjustable-Rate Mortgage (ARM)

Adjustable-rate mortgages offer a flexible option for purchasing or refinancing. With an adjustable-rate mortgage, the initial interest rate is generally lower than a fixed-rate, but, as the name suggests, adjustable- rate mortgage products have interest rates that may increase after consummation. After the introductory period, if the rate goes up, your monthly payment goes up. If the rate goes down, your payment goes down as well.

When to choose it:

• Pick an adjustable-rate mortgage if your income is likely to increase in the future or you only plan on being in a home for a short period of time.

Tip: Some lenders may require you to pay special fees or penalties for paying off your adjustable-rate mortgage early. We believe paying off your mortgage early should be rewarded, not penalized, so we don't charge you fees for paying off your home sooner than your term.

Other Mortgage Options

First-time Homebuyer Programs

Buying your first home doesn’t have to be a difficult or a trying experience.  Many first-time homebuyers are a good fit for a number of conventional lending products and government-insured financing programs including FHA, VA and Rural Development loans. Our experienced, knowledgeable lenders can assist you in finding the right loan or program for your situation, walk you through the application process and help you achieve your dream.

Building Your Dream Home

If you’re building a new home, don’t worry – you don’t need to build your finances from the ground up. A one-time closing construction loan can make your dream home a reality. Combined with long-term financing like your mortgage, a construction loan provides funds to pay contractors and suppliers during the building process. Payments are interest-only during the entire construction period, and when building is complete, your loan will modify into a full amortization with principal and interest payments and payments for insurance, taxes and mortgage insurance (if applicable*). You save time and money because you don’t have to secure and close on two separate loans.

*If an escrow account for tax, insurance and/or mortgage insurance payments is required or requested, then additional monies may be due at time of modification.

Plan Your Way Home

Our process is designed to promote and support the dream of home ownership. We have access to many resources that can assist you on your home buying journey. They include homebuyer education and financial literacy training as well as pre-purchase credit counseling offered through HUD approved housing counseling agencies. In addition, we can identify programs that may require minimal to no down payment, closing costs and down payment assistance for qualified borrowers.

Ready to start the journey to home ownership? Plan Your Way Home today.

Private Client Loans

For our high net worth clients we offer a variety of flexible home loans with no private mortgage insurance, no insurance or tax escrows and low closing costs. Private Banking mortgage services are offered exclusively to our clients who meet the Private Banking relationship criteria. Please see a banker for details and eligibility requirements. Other restrictions may apply.

Refinancing

There are many benefits to refinancing your current mortgage, especially with today’s historically low interest rates. Mortgage refinancing is a great way to reduce your interest rate, lower monthly payments, consolidate debt or even pay off your mortgage sooner. Just like first-time mortgages, we offer a number of refinancing options to fit your financial needs. Buying a home or considering a refinance is an exciting time, and you should feel completely confident in your mortgage decision

For more information, check out our Hancock Whitney Bank Mortgage FAQs.

Jumbo Loans

These are fixed- or adjustable-rate loans that exceed the maximum size of a conforming loan. According to guidelines by Fannie Mae and Freddie Mac, standard conforming loans are typically limited to $484,350. If you need a loan larger than that maximum, a jumbo loan could be ideal for you. Some programs even accommodate loan amounts of up to $3,000,000.