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
|
|
|
|
Balloon
Mortgages
- 7 year
- 5 year
|
- 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 or if you cannot refinance or if
you cannot exercise the conversion
option
|
|
|
|
| First
Time Buyer Programs |
- Lower down
payment
- Easier to
qualify
- Sometimes
you may get lower rates
|
- 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 |
- Don’t
need to verify income
- Faster
approval
|
- Higher
rates
- Higher
down payment
|
|
|
|
| No
point, No fee Programs |
- No closing
costs
- Less money
required to close
|
- Higher
rates
- Higher
payments
|
|
|
|
| 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
|
|
|
|
