Buying a home is a big step—and financing it shouldn’t feel overwhelming. At RARE Charleston, we’re here to help you navigate the mortgage process with confidence. Whether you’re a first-time buyer or a seasoned investor, understanding your mortgage options is key to finding the right fit for your financial goals.
First, Determine How You'll Pay Interest
When choosing a mortgage, one of the first decisions you’ll need to make is how your interest will be structured. This affects how much you’ll pay over the life of the loan—and how predictable your monthly payments will be.
Fixed-rate mortgage
- Enjoy the stability of a consistent interest rate and payment over the entire term of your loan.
- Perfect for buyers who plan to stay in their home long-term.
- Offers peace of mind against rising interest rates.
Adjustable-rate mortgage
- Starts with a lower interest rate that adjusts after a set period.
- Ideal for buyers who plan to move or refinance within a few years.
- Potential for savings early on—but payments can increase over time.
Two-step mortgage
- Combines features of fixed and adjustable-rate loans.
- You’ll start with a fixed rate for a few years, then move to an adjustable rate.
- Good for buyers who want initial stability and long-term flexibility.
Next, Choose Your Loan Type
Different loan types are designed to meet different needs. From government-backed programs to special lender incentives, there’s something for every buyer.
Conventional loan
- Not insured by the government—ideal for buyers with strong credit and a solid down payment.
- Often comes with competitive rates and flexible terms.
- Typically requires private mortgage insurance (PMI) if you put down less than 20%.
USDA loan
- Available for properties in eligible rural and suburban areas.
- Zero down payment required for qualified buyers.
- Backed by the U.S. Department of Agriculture—great for buyers looking outside city limits.
FHA loan
- Government-insured loan designed to help lower-credit or first-time buyers.
- Requires a smaller down payment—often as low as 3.5%.
- Includes mortgage insurance premiums for added protection.
VA loan
- Available to veterans, active-duty service members, and eligible military spouses.
- Zero down payment and no PMI required.
- Backed by the Department of Veterans Affairs with favorable terms and rates.
Balloon mortgage
- Features low monthly payments with a large final payment (the “balloon”) at the end.
- Can be a short-term solution for buyers expecting future income or planning to sell quickly.
- Higher risk if you're not prepared for the final payment.
Shared-appreciation
- You share future gains (or losses) in your home’s value with a lender or investor.
- May reduce upfront costs or lower interest rates.
- An option for buyers open to creative financing.
First-time buyer loans
- Tailored to new buyers with lower down payments, grants, or reduced fees.
- Often supported by federal, state, or local programs.
- Can make homeownership more accessible for those just starting out.
Lender-specialty loans
- Offered by private lenders with custom terms or promotions.
- May include down payment assistance or interest rate incentives.
- Ideal for buyers working with a preferred lender or looking for exclusive deals.
Finally, Calculate Your Mortgage
Want to know how much house you can afford? Use our mortgage calculator to estimate your monthly payment, including principal, interest, taxes, and insurance. It’s a simple way to start planning your budget with confidence.