|
Loan
Programs |
Advantages |
Disadvantages |
|
Fixed Rate Mortgages
30 year fixed
15 year fixed
|
• Monthly payments are fixed
over the life of the loan• Interest
rate does not change
• Protected if rates go
up
• Can refinance if rates
go down |
• Higher Interest rate
• Higher mortgage payments
• Rate does not drop if
interest
rates improve
|
|
Adjustable Rate Mortgages
10/1 ARM
7/1 ARM
3/1 ARM
1 Year ARM
6 Month ARM
1 Month ARM
|
• Lower initial monthly
payment • Lower
payment over a shorter
period of time
• Rates & payment may go
down if
rates improve
• May qualify for higher
loan
amounts |
•
More risk •
Payments change over time
• Potential for high
payments if
rates go up
|
|
Balloon Mortgages
7 years
5 years
|
•
Lower initial monthly payment •
Monthly payment over a shorter
period of time
• Many balloon mortgages
offer the
option to convert to a new loan after
the initial term
|
•
Risk of rates being higher at
the end of the initial fixed
period• Risk of foreclosure if you
cannot make balloon payment
or if you cannot refinance or if
you cannot exercise the
conversion option |
First Time Buyer
Programs
|
•
Lower down payment •
Easier to qualify
• Sometimes you may get
lower
rates
|
•
May be subject to income and
property value limitations• Some
programs which have
government subsidies may
have a recapture tax if you sell
the house too early |
|
Stated Income Programs |
•
Don't need to verify income •
Faster approval |
•
Higher rates •
Higher down payment |
|
No point, No fee
Programs |
•
No closing costs •
Less money required to close |
•
Higher rates •
Higher down payment |
|
Imperfect Credit
Programs
|
•
Potential for reestablishing credit if
you pay your mortgage on time• When
used for debt consolidation,
you may be able to reduce your
monthly debt payment
|
•
Higher rates •
Terms may not be as favorable
• Harder to get long term
fixed
loans
• Loans may have
prepayment
penalties |
|
Home Equity Line of
Credit
|
•
You only borrow what you need •
Pay interest only on what you
borrow
• Flexible access to
funds
• Interest may be
deductible
|
•
Rates can change. The
maximum interest rate is
normally high• Payments can change
• Harder to refinance
your first
mortgage |
|
Home Equity Fixed Loan
|
•
Fixed payment •
Interest may be tax deductible
|
• Higher interest rates then
on
1st mortgages• Harder to refinance
your first
mortgage |
|
Besides our standard loan
programs, we also have a large number of unique programs
to serve your needs:
|