Fixed Rate
Mortgages |
Advantages |
Disadvantages |
- 30 year fixed
- 15 year fixed
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- 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
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- Higher interest rate
- Higher mortgage payments
- Rate does not drop if interest rates improve
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Adjustable Rate
Mortgages (ARM) |
Advantages |
Disadvantages |
- 10/1 ARM
- 7/1 ARM
- 5/1 ARM
- 3/1 ARM
- 1 year ARM
- 6 month ARM
- 1 month ARM
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- Lower initial monthly payment
- Rates and payments may go down if rates improve
- May qualify for higher loan amounts
- 30 year term, no balloon payment
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- More risk
- Payments may change over time
- Potential for higher payments if rates increase
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Balloon Mortgages |
Advantages |
Disadvantages |
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- Lower initial monthly payment
- Lower payment for a predetermined period of time
- Many balloon mortgages offer the option to convert to a new loan after the initial term
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- Risk of rates being higher at the end of the initial fixed period
- Risk of foreclosure if you cannot make balloon payment, refinance, or exercise the conversion option
- Balloon payment requires you to sell or refinance after the term, as opposed to a 7/1 or 5/1 program with a 30 year term
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| First Time Buyer Programs |
Advantages |
Disadvantages |
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- Lower down payment
- Easier to qualify
- Lower rates may be available
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- May be subject to income and property value limitations
- Some government subsidized programs may generate a recapture tax if you sell the house too soon
- Education courses may be required to qualify for these loans
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| No point, No fee Programs |
Advantages |
Disadvantages |
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- No out-of-pocket loan costs at closing
- Closing costs are paid from the lender rebate
- Less money required to close
- Refinance without increasing your loan amount
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- Higher rates
- Higher payments
- Some lenders may have a short payoff penalty which is usually charged to the loan broker, but may be passed on to you
- Some require a prepayment penalty for the first one to five years
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| In addition to our standard loan programs, you may benefit by obtaining one of our many special programs: |
- Purchase your home with no down payment using Private Mortgage Insurance (PMI) or Lender-paid Mortgage Insurance (MI).
- Piggyback loans: 80-10-10 or 80-15-5. Avoid PMI payments by using Lender-paid MI.
- Debt consolidation programs.
- Home Improvement loans.
- You may qualify even if you've been turned down before!
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