Years
you plan to stay in the house |
Recommended
Program |
1-3 |
3/1 ARM, 1 year ARM
or 6 month |
3-5 |
5/1 ARM |
5-7 |
7/1 ARM |
7-10 |
10/1 ARM, 30 yr fixed
or 15 yr fixed |
10+ |
30 year fixed or 15
year fixed |
Talk
Live Support| Loan Program | Advantages | Disadvantages |
| 30 year fixed | Monthly payments are fixed | Higher interest rate |
| 15 year fixed | Interest rate does not change | Higher mortgage payments |
| Protected if rates go up | Rate does not drop if interest rates improve | |
| Can refinance if rates go down |
Talk
Live Support| Loan Program | Advantages | Disadvantages |
| Adjustable Rate Mortgages |
Lower initial monthly payment | More risk |
| Lower payment over shorter period of time | Payments may change over time | |
| Rates and payments may go down if rates improve | Potential for high payments if rates go up | |
| May qualify for higher loan amounts |
Talk
Live Support | Loan Program | Advantages | Disadvantages |
| Balloon Mortgages |
Lower initial monthly payment | Risk of rates being higher at the end of the intial fixed period. |
| Lower payment over shorter period of time | Risk of foreclosure if you cannot make balloon payment or if you cannot refinance or if you cannot exercise the conversion option | |
| Many balloon mortgages offer the option to convert to a new loan after the initial term | ||
Talk
Live Support | Loan Program | Advantages | Disadvantages |
| First Time Buyer Programs | Lower down payment | May be subject to income and property value limitations |
| Easier to qualify | Some programs which have government subsidies may have a recapture tax if you sell the house too early. | |
| Sometimes you may get a lower rate | ||
Talk
Live Support | Loan Program | Advantages | Disadvantages |
| Stated Income Programs | Don't need to verify income | Higher rates |
| Faster approval |
Higher down payment |
Talk
Live Support | Loan Program | Advantages | Disadvantages |
| No Point, No Fee Programs | No closing costs | Higher rates |
| Less money required to close |
Higher down payment |
Talk
Live Support | Loan Program | Advantages | Disadvantages |
| Imperfect Credit Programs | Potential for reestablishing credit if you pay your mortgage on time. | Higher rates |
| When used for debt consolidation, you may be able to reduce your monthly debt payment | Terms may not be as favorable | |
| Harder to get long term fixed loans | ||
| Loans may have prepayment penalties |
Talk
Live Support | Loan Program | Advantages | Disadvantages |
| Home Equity Line Of Credit | You only borrow what you need | Rates can change. |
| Pay interest only on what you borrow | The maximum interest rate is normally high. | |
| Flexible access to funds | Payments can change | |
| Interest may be tax deductible | Harder to refinance your first mortgage |
Talk
Live Support