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
5/1 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

Interest Only Program

• Qualify for a larger loan amount or reduce your monthly payment using the interest only ARM program.
• The loan amount can be up to $2,000,000.
• The Interest Only ARM programs available are 5/1, 7/1, and 10/1 for Conforming and non conforming, and a 3/1 ARM for Non Conforming loan amounts.

• The loan is designed for people who have irregular income such as commission sales, lawyers and accountants.
• Choose each month between regular payment, interest only payment or a payment much lower than either.

First Time Buyer Programs

• Lower down payment - My community or FHA
• Easier to qualify

• May be subject to income and property value limitations

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 1^st mortgages
• Harder to refinance your first mortgage