WHICH LOAN IS RIGHT FOR YOU?
It’s important to know all of your loan options. The table below shows the different loan options and their pros and cons. This is a quick guide on your loan option, however, I can answer any specific questions you may have. An informed mind makes the best decision. We’re here to help.
Mortgage Options based on the number of&years you plan to stay in your home
- 1-3 years:& 3/1 ARM, 1 year ARM or 6 month ARM
- 3-5 years: 5/1 ARM
- 5-7 years: 7/1 ARM
- 7-10 years: 10/1 ARM, 30 year fixed or 15 year fixed
- 10+: 30 year fixed or 15 year fixed
MORTGAGE PROGRAMS
Fixed Rate Mortgages
- 30 Year fixed
- 15 Year fixed
Pros
- 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
Cons
- Higher interest rate
- Higher mortgage payments
- Rate does not drop if interest rates improve
First Time Buyers
Pros
- Lower Down payment
- Easier to qualify
- Sometimes you may get lower rates
Cons
- 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
Pros
- Don’t need to verify income
- Faster approval
Cons
- Higher rates
- Higher payments
No Point, No Fee Programs
Pros
- No closing costs
- Less money required to close
Cons
- Higher rates
- Higher payments
Imperfect Credit Programs
Pros
- 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
Cons
- 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
Pros
- You only borrow what you need
- Pay interest only on what you borrow
- Flexible access to funds
- Interest may be tax deductible
Cons
- Rates can change, max rates are normally high
- Payments can change
- Harder to refinance your first mortgage
Home Equity Fixed Loan
Pros
- Fixed payments
- Interest may be tax deductible
Cons
- Higher interest rates than on 1st mortgages
- Harder to refinance 1st mortgage