Mortgage Programs

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Which Mortgage Loan Is Right For Me?

Fixed Rate	Adjustable Rate	Balloon Loans
First Time Buyer	Stated Income	No Cost Loans
Hard Money	Equity Line	Fixed Rate 2nd

Years You Plan To Keep Mortgage	Recommended Program
1 - 3	Option ARM, 6-month ARM, 1-year ARM, 2/28 ARM, 3/6 ARM
3 - 5	Option ARM, 3/6 ARM, 5/6 ARM
5 - 7	5/6 ARM, 7/6 ARM
7 - 10	7/6 ARM, 10/6 ARM, 15-year fixed rate, 30-year fixed rate
10+	15-year fixed rate, 30-year fixed rate

Programs	Advantages	Disadvantages
Fixed Rate Mortgage Loans
30-year fixed rate 15-year fixed rate	Monthly payments are fixed thoughout the life of the loan Rates are guaranteed not to go up Can refinance if rates fall	Higher interest rate Higher mortgage payments Rate does not fall with interest rate improvement
Adjustable Rate Mortgage (ARM) Loans
10/6 ARM 7/6 ARM 5/6 ARM 3/6 ARM 2/28 ARM 1-year ARM 6-month ARM 1-month ARM Option ARM	Lower monthly payment for the 1st 3-5 years versus fixed rate interest only loans Rates & payments may fall with falling rates	Guaranteed payment & interest rate period is shorter versus fixed rate loans Payments can change monthly or annually unless fixed pay Potential for higher payments if rates go up
Balloon Mortgage Loans
7-year 5-year	Guaranteed payment & interest rate period is shorter versus fixed rate loans Lower initial monthly payment & interest versus fixed rate loans Convert to a new loan after the initial term may be an option.	Risk that rates are higher at the end of the loan term Risk of foreclosure if you not able to pay out balloon payment or if you cannot qualify to refinance or excercise exercise the conversion option
First Time Buyer Programs
	Lower down payment Easier to qualify Lower rates possible in some cases	May be subject to income & property value limitations Some programs which have government subsidies may have a recapture tax/profit if you sell the house too early.
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Stated Income Programs
	Income is "stated" & not verified No income documentation is required Faster approval	Higher rates & payment if B-D Credit Higher down payment for non-owner occupied property
No Cost Loans (i.e. No points & No fees) *
	No closing costs Less money required to close	Higher rates Higher payments
* Note: there is a better way of accomplishing no cost programs. Call for details.
Home Equity Line of Credit (HELOC)
	Borrow only what you need Pay interest only on what you borrow Easy access to funds Interest may be tax deductible versus credit card debt, which is usually not	Payment & Rate is variable. Harder to refinance your first mortgage
Fixed Rate 2nd Mortgage
	Fixed payments Interest may be tax deductible versus credit card debt, which is usually not	Higher interest rates than 1^st mortgage Harder to refinance your first mortgage
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