| •
Fixed Rate Mortgages •10,
15, 20, 30, 40, and 50 Years: |
| • |
Monthly
payments are always fixed over the life of the loan. |
| • |
Interest
rate does NOT change. |
| • |
Borrower
is protected if rates increase, can refinance if rates decrease. |
| •
Adjustable Rate Mortgages (ARM) •
30 Year Amortization: |
| • |
Lower
initial monthly payment. |
| • |
Rates
and payments may go down if rates improve. |
| • |
Borrower
may qualify for a higher loan amount. |
| • |
Available
in 10 year, 7 year, 5 year, 3 year, 1 year, 6 month, and
1 month format. |
| • |
The
10, 7, 5 and 3 year ARM's generally turn into a 1 year ARM
after the initial fixed period ends. |
| •
Balloon Mortgages •
30 Year Amortization: |
| • |
Lower
initial monthly payment. |
| • |
Lower
payment for a predetermined period of time. |
| • |
Some
balloon mortgages offer a conversion option after the initial
term. |
| •
First Time Home Buyer Programs: |
| • |
Offers
a lower down payment. |
| • |
Easier
for new borrowers to qualify. |
| • |
Lower
rates may be offered. |
| •
Stated Income Programs: |
| • |
Good
for well qualifed borrowers with complicated income
documentation. |
| • |
Generally
require higher FICO scores (credit scores). |
| • |
May
require additional down payment. |
| • |
Will
entail higher interest rate. |
| •
Low
or No Closing Cost Programs: |
| • |
Low
or no out-of-pocket loan costs at closing. |
| • |
Closing
costs may be paid from lender rebate with less money required. |
| • |
Refinance
without increasing your loan amount. |
| • |
Will
entail higher interest rate. |
| •
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 monthly
payments. |
| • |
Generally
have higher rates and terms may not be as favorable. |
| • |
May
have a pre-payment penalty of from 1 to 5 years. |
| •
Home Equity Line of Credit
(HELOC):
|
| • |
You
buy what you need and pay interest only on what you borrow. |
| • |
Flexible
access to funds and the interest may be tax deductible. |
| • |
May
be free of closing costs and is a good source of emergency
funds. |
| • |
Can
be used for debt consolidation and rates are generally lower
than consumer loan or credit card rates. |
| •
Home Equity Fixed Loans: |
|
| • |
Fixed
payments for a fixed period of time. |
| • |
Interest
may be tax deductible. |
| • |
Use
cash for any purpose. |
| • |
Higher
interest rate than 1st Mortgage and interest is paid on
the entire loan amount compared to an Equity Line of Credit. |
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