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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 or 15 year fixed
10+ 30 year fixed or 15 year fixed
Loan Programs:
Fixed Rate Mortgages
30 year fixed
15 year fixed
Advantages
* 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
Disadvantages
* 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
Advantages
* 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
Disadvantages
* More risk
* Payments may change over time
* Potential for high payments if rates go up
Balloon Mortgages
7 year
5 year
Advantages
* 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.
Disadvantages
* 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
Advantages
* Lower down payment
* Easier to qualify
* Sometimes you may get lower rate
Disadvantages
* 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
Advantages
* Don't need to verify income
* Faster approval
Disadvantages
* Higher rates
* Higher down payment
No point, No fee Programs
Advantages
* No closing costs
* Less money required to close
Disadvantages
* Higher rates
* Higher payments
Imperfect Credit Programs
Advantages
* 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
Disadvantages
* 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
Advantages
* You only borrow what you need
* Pay interest only on what you borrow
* Flexible access to funds
* Interest may be tax deductible
Disadvantages
* Rates can change. The maximum interest rate is normally high.
* Payments can change
* Harder to refinance your first mortgage
Home Equity Fixed Loan
Advantages
* Fixed payments
* Interest may be tax deductible
Disadvantages
* 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