Mortgage Loan Types

From the traditional fixed-rate mortgage to special programs for veterans and rural borrowers, we have a solution to fit your lending need.

Fixed Rate Mortgage
The traditional fixed-rate mortgage has a constant interest rate and monthly payments that never change, which gives you predictability and stability for your budget. This may be a good choice if you plan to own your home for an extended period of time.

A longer-term loan results in lower monthly payments, but higher interest cost over the life of the loan. On the other hand, a shorter-term loan results in higher monthly payments, but a lower interest rate and lower interest cost over the life of the loan. Many borrowers opt for a longer-term loan and voluntarily make larger payments that will pay off their loan in fewer years.

FHA Fixed Rate Mortgage
FHA Mortgage Loans offer fixed rate financing with low down payment options, as low as 3.5%, and a 620 FICO score. FHA Mortgage Loans are backed by the Federal Housing Administration and typically have more flexible lending requirements and carry lower monthly mortgage insurance premiums than Conventional financing. This program is available for Primary Residences only.

Zero Down Payment Home Loan
Under this program, qualified buyers will receive 100% financing for their home purchase, which can help retain liquid assets and increase purchasing power. Amortization terms for various fixed rate and 5/1, 7/1, or 10/1 ARM products are available. These loans require private mortgage insurance.

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 term of the loan. It's a good choice for people who expect to move (or refinance) before or shortly after the adjustment occurs.

Max Cash Refinancing
This program provides qualified borrowers maximum access to the equity in their home; up to 90% or 95% of the home’s appraised value, depending on loan amount. Loan terms are available for fully amortizing, multiple term options available for fixed rate and 5/1, 7/1 and 10/1 adjustable rate mortgages. These loans require private mortgage insurance. Not available in Texas.

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 time frame 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
VA Mortgage loans are guaranteed by the Department of Veterans Affairs and are for those that have served or currently serving in the US Military. VA Loans offer low and no down payment options and do not require any mortgage insurance. Interest rates are typically lower than traditional Conventional financing. This program is available on Primary Residences only.

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

  1. 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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