In the past, every home owner got the same loan: a 30 year fixed mortgage. Today there are many different loan programs and choosing the right one could save you hundreds of dollars on your monthly payments.
| How Long Do You Plan On Living In The House? |
We Recommend: |
|
| Not Very Long (1-3 Years) |
3/1 ARM, 1 year ARM or 6 month ARM |
| A few years (3-5 Years) |
5/1 ARM |
| At least 5 years (5-7 years) |
7/1 ARM |
| Around 10 years ( 7-10 years) |
10/1 ARM, 30 yr fixed or 15 yr fixed |
| A long time (10 plus years) |
30 year fixed or 15 year fixed |
|
| Loan Programs |
Advantages |
Disadvantages |
30 year Fixed
15 year Fixed |
- Monthly payments won't change
- Fixed interest rate
- 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 (ARMS) |
- 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 |
- 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, cannot refinance, or if you cannot exercise the conversion option
|
| First Time Buyer Programs |
- Lower down payment
- Easier to qualify for
- 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.
|
| No point, No fee Programs |
- No closing costs
- Less money required to close
|
- Higher rates
- Higher payments
|
| 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
|
In addition to these standard loan programs, we offer a large number of specialized loans and affordable financial services to fit your needs. Please call us or complete our contact form for more information.
