| Years you plan to keep your house |
Recommended program |
| 1-3 |
3/1 ARM, 1 year ARM or 6 month ARM |
| 3-5 |
5/1 ARM |
| 5-7 |
7/1 ARM |
| 7-10 |
10/1 ARM, 30 year fixed or 15 year fixed |
| 10+ |
30 year fixed or 15 year fixed |
| Loan Programs |
Advantages |
Disadvantages |
| Fixed Rate Mortgages |
40 year fixed
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 and payments may go down if rates improve
- May qualify for higher loan amounts
|
- More risk
- Payments may change over time
- Potential for high payments if rates go up
|
|
| Balloon Mortgages |
7 year
5 year |
- Lower initial monthly payment
- Lower 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 rate
|
- 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 payments
|
|
| 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 tax 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 payments
- Interest may be tax deductible
|
- Higher interest rates than 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:
- Purchase a house with 0 down
- Piggyback loans 80-10-10 or 80-15-5. No PMI payments even with 5% or 10% down
- Debt consolidation programs
- Home Improvement loans
- Qualify even if you may have been turned down before!
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