| 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
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 |
| Interst only program |
Lower monthly payment |
Payments will change over time
Principal will not decrese . |
| Stated Income Programs |
Don't need to verify income
Faster approval |
Higher rates |
| 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 1st mortgages
Harder to refinance your first mortgage |
