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Understanding alternatives to fixed-rate mortgage

INDIANAPOLIS (WISH) — The housing market is cooling down and prices are improving for buyers. But, mortgage rates are still rising.

David McCoige, president of production at Tucker Mortgage L.L.C., visited Daybreak on Tuesday to offer some tips to home buyers.

Assumable mortgages

Federal Housing Administration and Veterans Affairs loans are assumable mortgages.

“If someone purchased a home in the last couple of year and they have an FHA mortgage, let’s say it is 2.5%, a buyer could approach that seller, make an offer, assume that mortgage and take over the balance of that mortgage at 2.5% for the remainder of the loan…if you can find that connection, that’s a very interesting option when you’re looking at rates now that are significantly higher than that,” McCoige said.

Adjustable-rate mortgages

Most adjustable-rate mortgages are considered hybrid, McCoige said.

“So we have 5, 10, 15 year adustables available. That gives people a long amount of time,” McCoige said.

Down payment assistance programs

If you don’t have the magical 20% all ready to go for a down payment, there are systems in place to help.

The Indiana Housing Community Development Association helps people get down payment assistance purchasing a new home.

Watch the video to hear more about these tips.