| Loan Program | 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
- Ask about fixed rate interest-only options
| - Higher interest rate
- Higher mortgage payments
- Rate does not drop if interest rates improve
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| Loan Program | Advantages | Disadvantages |
|---|
Adjustable Rate Mortgages - 10/1 ARM
- 7/1 ARM
- 5/1 ARM
- 3/1 ARM
- 1 year ARM
- 6 month ARM
- 1 month ARM
| - Lower initial monthly payment
- Rates and payments may go down if rates improve
- May qualify for higher loan amounts
- 30 year term, no balloon payment
- Lowest possible payment
- Interest-only options
| - More risk
- Payments may change over time
- Potential for higher payments if rates increase
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| Loan Program | Advantages | Disadvantages |
|---|
| - Rates not higher < or = 65% loan to value ratio
- Stated income is OK
- Low ARMS up to 90 to 95%
- 100% loan to value ratio programs available
- Cash-out refinances OK
| - Some rates on some programs will be higher
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| Loan Program | Advantages | Disadvantages |
|---|
| First Time Buyer Programs | - Lower down payment
- Easier to qualify
- Lower rates may be available
| - May be subject to income and property value limitations
- Some government subsidized programs may generate a recapture tax if you sell the house too soon
- Education courses may be required to qualify for these loans
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| Loan Program | Advantages | Disadvantages |
|---|
| Stated Income Programs | - Don't need to verify income and/or assets
- Faster approval
- Good for borrowers who may not qualify with a full income documentation program
- Our rates are not higher for stated income, units and non-owner occupied <65% loan-to-value ratio
| - Higher rates (over 70% loan-to-value)
- Lower loan amounts over $1,500,000
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| Loan Program | Advantages | Disadvantages |
|---|
| Interest Only Programs | - You have several payment options
- Lower monthly payments
- Qualify for a higher loan amount
- Qualify at the interest only payment
- Option to pay the full normal payment
- Interest only payments for up to ten years
| - Sometimes rate are higher rates
- Principal loan balance will not decrease during the interest only payment period
- Payment will be higher for the remaining term after interest-only period ends as loans must be fully amortized at some point in all home loans
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| Loan Program | Advantages | Disadvantages |
|---|
| No point, No fee Programs | - No out-of-pocket loan costs at closing
- Closing costs are paid from the lender rebate
- Less money required to close
- Refinance without increasing your loan amount
| - Higher rates
- Higher payments
- You must hold loan for at least 4 months
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| Loan Program | Advantages | Disadvantages |
|---|
| Imperfect Credit Programs | - 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
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| Loan Program | Advantages | Disadvantages |
|---|
| 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
- May be free of closing costs
- A good source for an emergency fund, if set up in advance
- Can be used for debt consolidation and lower payments
- Rates are usually lower than consumer loan or credit card rates
- You can fix a portion of the loan, while the balance floats!
| - Rates can change. The maximum interest rate can be relatively high
- Payments can change
- Harder to refinance your first mortgage
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| Loan Program | Advantages | Disadvantages |
|---|
| Home Equity Fixed Loan | - Fixed payments
- Interest may be tax deductible
- Get cash out for any purpose
| - Higher interest rates compared to first mortgage
- Harder to refinance your first mortgage
- Interest is paid on the entire loan amount, compared to an equity line of credit
- If you need additional money, you will need to refinance. Try our line of credit with a fixed rate partion for part of your loan!
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