Loan Programs


Which loan is right for me?

Years you plan to stay in the 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 Types

Fixed Rate Mortgages

Loan Programs
Advantages
Disadvantages

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

Loan Programs
Advantages
Disadvantages

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

Loan Programs
Advantages
Disadvantages

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

Loan Programs
Advantages
Disadvantages

 
  • 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

Loan Programs
Advantages
Disadvantages

 
  • Don't need to verify income
  • Faster approval
  • Higher rates
  • Higher down payment

No point, No fee, and 0 down Programs

Loan Programs
Advantages
Disadvantages

 
  • No closing costs
  • Less money required to close
  • Higher rates
  • Higher payments
  • May have to pay (PMI) Private Mortgage Insurance

Imperfect Credit Programs

Loan Programs
Advantages
Disadvantages

 
  • Potential for re-establishing 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

Loan Programs
Advantages
Disadvantages

 
  • 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

Loan Programs
Advantages
Disadvantages

 
  • Fixed payments
  • Interest may be tax deductible
  • Higher interest rates than on 1 st mortgages
  • Harder to refinance your first mortgage

Interest Only Payment Option
Loan Programs
Advantages
Disadvantages
 
  • Not paying down principle
  • Higher mortgage payment once the interest only option expires
  • Low mortgage payment for the first five to ten years

Piggyback loans 80-10-10 or 80-15-5 and or 80-20.
No PMI payments even with 5% or 10% down.

Loan Programs
Advantages
Disadvantages
 
  • Get into a house with little or no down payment
  • Two monthly statements
  • High Loan to value

Debt consolidation, home improvements and cash out refinance programs
Loan Programs
Advantages
Disadvantages
 
  • Debt consolidation
  • Home improvement
  • Cash to use at your discretion
  • Higher loan to value

Construction Loans
Loan Programs
Advantages
Disadvantages
 
  • Create the home you have always wanted
  • Construction may take 6, 9 or 12 months