| Loan Programs - which one is right for me |
Every client's needs are different, and no single program is best for all clients. That said, here are some general rules of thumb about the different types of mortgages available today. Call us to discuss these in more detail, and to custom-fit a program to your exact needs.
|
Loan Term
|
Recommended Program
|
| 1-3 |
3/1 ARM, 1-year ARM, 6-month ARM |
| 3-5 |
5/1 ARM, HOA |
| 5-7 |
7/1 ARM, HOA |
| 7-10 |
10/1 ARM, 30-year Fixed, 15-year Fixed, HOA |
| 10+ |
30-year Fixed, 15-year Fixed, HOA |
|
Loan Programs
|
| Fixed Rate Mortgages |
Advantages |
Disadvantages |
30-year Fixed
&
15-year Fixed |
- 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
|
- Higher interest rate
- Higher mortgage payments
- Rate does not drop if interest rates improve
|
| |
|
|
| Adjustable Rate Mortgages |
Advantages |
Disadvantages |
10/1 ARM
7/1 ARM
5/1 ARM
3/1 ARM
1-mo., 6-mo, 1-yr ARM's |
- Lower initial monthly payment
- Lower payment over a shorter time period
- Payment may go down if rates improve
- May qualify for higher loan amounts
- Historically less expensive than fixed rate loans as borrower takes on rate-related risk (versus the lender bearing that risk)
|
- More risk
- Payments may change
- high payments if rates go up dramatically
|
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