Exploring Modern Financing Options

Four image collage of a Taber home with a financing graphic in the middle.

Exploring Modern Financing Options

November 9, 2022

With tons of financing information online, you can find yourself getting overwhelmed as you search for the best way to finance your new construction home. At Homes by Taber, we are always keeping an eye on the ever-changing market in order to ensure that our customers have the most up-to-date information about all of the financial options available to them. Continue reading to learn more about modern financing options that can help you get the keys to your Taber home! 

Understanding the difference between Fixed Rate Mortgages and ARMs

There are two mortgage options that are leading the charge for homebuyers looking to purchase their new construction home soon, with the most common mortgage in past years being the fixed rate mortgage. One main reason as to why this mortgage was so popular was due to the fact that it was convenient and easy for homeowners to understand. If you were to purchase a home with a 30-year fixed rate mortgage, your interest rate would not change during that entire 30-year time period. 

The second option that has been gaining more popularity are adjustable rate mortgages (ARMs). With these, homebuyers would receive a lower interest rate for the first few years of the loan. Then, the interest rate could adjust up (increasing monthly payment) or down (decreasing monthly payment). In the past, ARMs were seen as something to avoid due to lack of understanding about them and lack of regulations on them. Regulations have changed to reduce the risk to the borrower with clear, transparent expectations over the life of the loan. With interest rates seeing a steady increase as the weeks and months go by, more and more individuals are looking into the idea of an ARMs to keep more money in their pockets each month they pay their mortgage.

If you would like to take a deeper dive or see some of this information from a leading mortgage industry expert, check out this easy to understand video that compares fixed rate mortgages to adjustable rate mortgages.

Understanding Adjustable rate mortgages 

In today’s market, homeshoppers can see the broad benefits of selecting an ARM loan thanks to the significantly lower interest rates that these loans receive. If the interest rate begins to adjust upwards after the predetermined timeframe, many consider refinancing to a 30-year fixed mortgage loan or refinancing to another ARM loan to get that sweet lower interest rate again. Some homeowners end up upgrading their home by the time the initial interest period is up, making an ARM loan a great option for a starter home. In fact, the average time a homeowner stays in their home is three to six years, which makes an ARM loan a smart choice for most.

ARMs use an index called SOFR (The Secured Overnight Financing Rate) which adjusts the interest rate that homeowners will be paying every 6 months. This is an automatic adjustment that the homeowner will never have to make on their own. Homeowners will have all of the information beforehand so they will never be surprised by what their new payment will be. 

The introductory rate period for an ARM can vary from 1 year to 15 years and each one is different. We have spent time doing all the research for you so we are able to direct our customers to the best loan option that fits your exact circumstances. Even Dave Ramsey is encouraging home shoppers to move forward now to take advantage of modern home financing options with the potential to refinance at a later time.

For example, if you have a 5-year ARM with a 4.5% introductory interest rate and 2/1/5 caps, your interest rate will be locked in at 4.5% for the first 5 years. The first number (2) means that you can only have a maximum 2 percentage point increase during your first adjustment period, meaning your interest rate will not be higher than 6.5%. Next, the second number (1) indicates the periodic cap which means that the next adjustment can’t take you over 7.5%. The final number (5) is your lifetime cap. This means that no matter how many rate adjustments you have in the future and no matter what is happening in the market at that time, your interest rate will never be more than 5 percentage points above the initial 4.5% introductory rate you began with.  

Another fact to understand about ARMs is that if interest rates begin to decrease, your mortgage rate will automatically adjust down as the market sees an overall decrease in interest rates. 

Fixed rate mortgages

While there are definite benefits that come from selecting an adjustable mortgage rate, a fixed rate mortgage is still an incredibly popular option among homeowners. These rates are easy to understand and give homeowners predictable interest payments that won’t change for the entire life of the loan. They are also the most widely available mortgage options throughout the country, meaning that almost any lender you speak to about your financial options will have this type of loan available to you. If interest rates see a decrease in the coming months or years, deciding to refinance your home is typically an incredibly streamlined process that many homeowners choose to do. 

Special Loan Options 

4.99% Interest Rate Loan 

For a limited time, Taber homebuyers can utilize a 3/3 ARM loan offer with a 4.99% interest rate. This loan requires a 10% down payment and does not require Private Mortgage Insurance in the monthly payment. Private Mortgage Insurance is typically required by mortgage lenders unless a homebuyer is putting 20% down on the home, so this contributes to huge savings for the homeowner. This loan offer is only valid on select Quick Move-In Homes that are marked with a special 4.99% Smart Buy icon so you may easily find them.


Home Ownership Possibilities Program (HOPP)

Another option for homeowners to look into is a special 30-year fixed mortgage home ownership program  that allows you to purchase the home you’ve always dreamed of owning that does not require Private Mortgage Insurance or a down payment! Many programs that remove downpayments are for first time homeowners only. However, through Homes by Taber’s partnerships, this program is available, even if you are not a first time homebuyer.  Home loans must be under $350,000 to qualify and many of our Quick Move-In Homes fall under that amount. Homes by Taber can easily get you in touch with the right people to help you through this easy no down payment option after locating the home that fits you best. 

We’re here to help

At Homes by Taber, we are constantly on the lookout for ways to help our homeowners purchase the home of their dreams. If you’re interested in learning more about the different financing options that are available to you at this time, give us a call at (405) 984-1185 in OKC or (918) 393-4149 in Tulsa or fill out our online form today. 

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Our Happy Homeowners

Loved working with this company for our new home. We had plenty of options and the included upgrades are so nice! No complaints! They worked with us to find our perfect home and we are so happy! Melissa was wonderful dealing with for our two walk throughs! Would definitely recommend for anyone looking to buy. For our 60 day walk - Gabriel came and inspected everything. He was awesome! Very thorou ...

Kelsee Volk

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