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Recommended program |
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1 Month Option ARM |
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3/1 ARM, 5/1 ARM |
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7/1 ARM |
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10/1 ARM |
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15/30/40 year fixed |
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40 year fixed
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30 year fixed
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20 year fixed
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15 year fixed
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Monthly payments are fixed over the life of the loan
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Interest rate does not change
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Protected if rates go up
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Can refinance if rates go down
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Higher interest rate
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Higher mortgage payments
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Rate does not drop if interest rates improve
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Adjustable Rate Mortgages |
Advantages |
Disadvantages |
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10/1 ARM
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7/1 ARM
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3/1 ARM
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1 year ARM
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6 month ARM
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1 month ARM
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Lower initial monthly payment
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Lower payment over a shorter period of time
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Rates and payments may go down if rates improve
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May qualify for higher loan amounts
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More risk
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Payments may change over time
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Potential for high payments if rates go up
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First Time Buyer Programs |
Advantages |
Disadvantages |
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Lower down payment
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Easier to qualify
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Sometimes you may get lower rates
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May be subject to income and property value limitations
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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 |
Advantages |
Disadvantages |
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Don’t need to verify income
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Faster approval
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Higher rates
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Higher down payment
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No Point Programs |
Advantages |
Disadvantages |
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Lower closing costs
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Less money required to close
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Higher rates
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Higher payments
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Home Equity Line of Credit |
Advantages |
Disadvantages |
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You only borrow what you need
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Pay interest only on what you borrow
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Flexible access to funds
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Interest may be tax deductible
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Rates can change. The maximum interest rate is normally high.
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Payments can change
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Harder to refinance your first mortgage
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Home Equity Fixed Loan |
Advantages |
Disadvantages |
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Fixed payments
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Interest may be tax deductible
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Higher interest rates than on 1st mortgages
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Harder to refinance your first mortgage
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