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Mortgage Products

The mortgage process doesn’t have to be difficult. The more you know the less stressfully the process will be. A Franklin First mortgage specialist can answer any questions you have and recommend what mortgage is best for you.


Fixed Rate Mortgage

The most common type of mortgage are fixed rate mortgages (FRM). In an FRM, the interest rate remains the same for the duration of the loan and are not affected by fluctuating market rates. There are actually many types of fixed rate mortgages to choose from and not just the standard 15 and 30-year fixed rate mortgages.


FRMs may be right for those who:

  • Plan on owning the property long-term (7 years or more)
  • Like to know exactly how much they will be paying each month
  • Currently have a high-interest adjustable rate mortgage (ARM)

Adjustable Rate Mortgage

In an adjustable rate mortgage (ARM), after an introductory fixed period, the interest rate fluctuates depending on the market. ARMs typically have a lower monthly interest rate and payment during the introductory fixed portion of the loan. After the “first adjustment,” the rate can go up and is subject to market fluctuation.


ARMs may be right for those who:

  • Plan on selling the property or refinancing within 7 years.
  • Don’t qualify for a FRM.
  • Expect their income to rise over the next few years.

Interest-only Mortgage

An interest-only mortgage requires that you make only the interest payments on your loan for a specified period of time. By not having to pay principal, this can mean extremely low initial monthly payments. However, you will not be reducing your principal balance. The interest-only feature is available on FRMs and ARMs


Interest-only mortgages may be right for those who:

  • Plan on selling the property or refinancing within 5 – 10 years.
  • Expect an increase in income in the coming years
  • Want the luxury of an option to pay principal and interest, or just interest in any given month if necessary

Home Equity Loans

A home equity loan is actually a second mortgage. It allows you to tap into your equity without changing the terms of your first mortgage. There are many reason for getting a home equity loan including debt consolidation, home improvements, investment property, buy a vacation home, school, a new business, etc. You choose the amount you want to borrow, and then apply for approval. With the many home equity loan programs available today, you can borrow up to 100% of your home’s equity. Typically, home equity loans have a fixed rate with a term of 10 to 30 years.


Home Equity Loans may be right for those who:

  • Wouldn’t benefit from cash-out refinancing
  • Need to pay for a large, one-time expense
    (home improvements, tuition etc)

Home Equity Line of Credit (HELOC)

A HELOC is a mortgage, usually secured as a second or junior lien against the property. Initially, there is a draw period during which the HELOC behaves like a credit card, except the security for the note is your home. You can pay it off, pull more money out, or make partial use of the total available money at any point. An added benefit, unlike credit cards is that the interest is usually tax-deductible and the rate is usually much lower. You can choose to take the entire amount in one lump sum at closing or draw on it like a checking account. You pay interest only on the portion that you draw. HELOC rates are tied to the prime rate and are variable.


HELOCs may be right for those who:

  • Wouldn't benefit from cash-out refinancing.
  • Don’t know exactly how much cash they need, but would like to have available cash down the road.

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