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Loan Programs

Fixed Rate Mortgages

 

  • 30 year fixed

  • 15 year fixed


Advantages

  • 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.

 

Disadvantages

  • Higher interest rate.

  • Higher mortgage payments.

  • Rate does not drop if interest rates improve.

Adjustable Rate Mortgages

 

  • 10/1 ARM

  • 7/1 ARM

  • 3/1 ARM

  • 1 year ARM

  • 6 month ARM

  • 1 month ARM


Advantages

  • Lower initial monthly payment

  • Lower payment over a shorter period of time

  • Rates and payments may go down if rates improve

  • May qualify for higher loan amounts

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Disadvantages

  • More risk

  • Payments may change over time

  • Potential for high payments if rates go up

First-Time Buyer Programs

 

Advantages

  • Lower down payment

  • Easier to qualify

  • Sometimes you may get lower rate

 

Disadvantages

  • May be subject to income and property value limitations

  • Some programs which have government subsidies may have a recapture tax if you sell the house too early.

Home Equity Fixed Loan

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Advantages

  • Fixed payments

  • Interest may be tax deductible

 

Disadvantages

  • Higher interest rates than on first mortgages

  • Harder to refinance your first mortgage

No Point, No Fee Programs

 

Advantages

  • No closing costs

  • Less money required to close

 

Disadvantages

  • Higher rates

  • Higher payments

Home Equity Line of Credit

 

Advantages

 

  • You only borrow what you need

  • Pay interest only on what you borrow

  • Flexible access to funds

  • Interest may be tax deductible

 

Disadvantages

 

  • Rates can change. The maximum interest rate is normally high.

  • Payments can change

  • Harder to refinance your first mortgage

 

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