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The best loan isn’t always the one with the lowest rate it’s the one that fits your life. Your lender will help you explore options, but here are the most common loan structures and programs in today’s market:

Residential Loan Options

Fixed-Rate Mortgage (15 or 30 Years)

• Your payment stays the same for the life of the loan.
• Best for long-term stability ideal if you plan to stay in the home 7+ years.
• Great for budgeting and peace of mind in rising-rate environments.

Adjustable-Rate Mortgage (ARM)

• Starts with a lower rate that adjusts after a set period (e.g., 5/6 ARM = fixed for 5 years, then adjusts every 6 months).
• Ideal if you plan to sell or refinance before the rate changes.
• Caution: Your monthly payment can rise sharply once the rate resets.

Hybrid ARMs (3, 5, 7, or 10-Year Fixed)

• Fixed rate for the first few years, then becomes adjustable.
• Offers initial savings but requires a longer-term financial plan if you stay in the property.

FHA vs. Conventional Loans: What You Should Know

• FHA Loans
• Backed by the Federal Housing Administration
• Lower down payment (as low as 3.5%)
• Easier credit score requirements
• Requires upfront and monthly mortgage insurance (MIP)
• Popular with first-time buyers or those with limited cash reserves
• Conventional Loans
• Not government-backed
• Typically requires 5%–20% down (3% for certain first-time buyer programs)
• No mortgage insurance if you put down 20% or more
• Better for buyers with strong credit and stable income

Your lender can help you compare monthly payments and long-term costs across both options because sometimes, the lowest down payment isn’t the best long-term strategy.

Residential Loans

What Are Origination Fees?

Origination fees are charges from the lender to process your mortgage typically 0.5% to 1% of the total loan amount. These fees cover services like underwriting, document preparation, and administrative work.

You’ll find them listed in your Loan Estimate (LE) and Closing Disclosure (CD). Be sure to compare lender estimates carefully a lower interest rate with higher origination fees might end up costing more than a slightly higher rate with lower fees.

Commercial Loans

For commercial financing, origination fees generally range from 0.5% to 1.5% of the loan amount. However, commercial lenders often bundle in legal fees, third-party reports, and underwriting costs, which can vary based on loan complexity and lender type. In commercial lending, these fees are negotiable, especially when working with relationship based banks or portfolio lenders. Reviewing the full fee structure beyond just the rate is key to protecting your bottom line.

Commercial Loan Options Commercial Fixed-Rate Loans

• Terms typically range from 5 to 25 years with amortization over 20–30 years.
• Stable payments suited for long-term holders.
• Available through banks, credit unions, CMBS lenders, or life insurance companies.

Variable-Rate Commercial Loans

• Rates tied to indexes like SOFR or the Prime Rate plus a spread.
• Used for value-add investments or short-term holding periods.
• Can include interest-only periods and balloon payments.

SBA 7(a) or 504 Loans (Owner-Occupied)

• SBA-backed options for small business property acquisition.
• Competitive rates, longer terms, and lower down payments.
• Requires owner-occupancy (typically 51% or more of the property).