Fixed Rate Mortgages
- 30 year fixed
- 15 year fixed
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- 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
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- Higher interest rate
- Higher mortgage payments
- Rate does not drop if interest
rates improve
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Adjustable Rate Mortgages
- 10/1 ARM
- 7/1 ARM
- 3/1 ARM
- 1 year ARM
- 6 month ARM
- 1 month ARM
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- 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
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- More risk
- Payments may change over time
- Potential for high payments if
rates go up
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Balloon
Mortgages
- 7 year
- 5 year
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- 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.
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- 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
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First
Time Buyer Programs |
- Lower down payment
- Easier to qualify
- Sometimes you may get lower rates
-
We now have 100%
Financing
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- 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.
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Stated
Income Programs |
- Don’t need to verify income
- Faster approval
-
We now have 100%
Financing
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- Higher rates
- Higher down payment
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No
point, No fee Programs |
- No closing costs
- Less money required to close
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- Higher rates
- Higher payments
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