Choosing the Correct Loan
Answering some questions up front will help determine which loan is going to be right for you. Take a moment to consider the advantages and disadvantages of different loan programs so when it comes time to apply for your loan, you better know what you need.
Which Loan is Right for me?
| Years you plan to Stay in the house | Recommended Program |
|---|---|
| 1-3 | 3/1 ARM, 1 year ARM or 6 month ARM |
| 3-5 | 5/1 ARM, 5 year Balloon |
| 5-7 | 7/1 ARM, 7 year Balloon |
| 7-10 | 10/1 ARM, 30 year or 15 year fixed |
| 10+ | 30 year fixed or 15 year fixed |
| Loan Programs | Advantages | Disadvantages |
|---|---|---|
Fixed Rate Mortgages |
|
|
30 year fixed |
monthly payments are fixed over the life of the loan |
higher interest rates |
15 year fixed |
interest rate does not change |
higher mortgage payments |
|
protected if rates go up |
rate does not drop if interest rates improve |
Adjustable Rate Mortgage |
|
|
10/1 ARM |
low Initial monthly payment |
more risk |
7/1 ARM |
lower payment over shorter period of time |
payments may change over time |
3/1 ARM |
rates and payments may go down if rates improve |
potential for high payments if rates go up |
1 year ARM |
may qualify for higher loan amounts |
|
6 month ARM |
|
|
1 month ARM |
|
|
| Loan Programs | Advantages | Disadvantages |
|---|---|---|
Balloon Mortgages |
|
|
7 year |
lower initial monthly payment |
risk of rates being higher at the end of the initial fixed period |
5 year |
lower payment over shorter period of time |
risk of foreclosure if you cannot make balloon payments or if you can not exercise the conversion option |
First Time Buyer Programs |
|
|
|
lower down payment |
may be subject to income and property value limitations |
|
easier to qualify |
some programs which have government subsides may have a recapture tax if you sell the house to early |
|
sometimes you may get lower rates |
|
Stated Income Programs |
|
|
|
don't need to verify income |
higher rates |
|
faster approval |
higher down payment |
No Point No Fee Programs |
|
|
|
no closing costs |
higher rates |
|
less money out of pocket |
higher payments |
Not So Perfect Credit Programs |
|
|
|
potential for re-establishing credit if you pay your mortgage on time |
higher rate terms may not be as favorable |
|
when used for debt consolidation, you may be able to reduce your monthly debt payments |
harder to get long term fixed loans and loans may have prepayment penalties |
| Loan Programs | Advantages | Disadvantages |
|---|---|---|
Home Equity Line of Credit |
|
|
|
you only borrow what you need |
rates can change. The maximum interest rate is normally high |
|
pay interest only on what you borrow |
choosing interest only payments results in a slower loan payoff |
|
flexible access to funds |
harder to refinance your First Mortgage |
|
interest may be tax deductible |
payments can change |
Home Equity Fixed Loan |
|
|
|
fixed Payments |
higher interest rates than on first mortgages |
|
interest may be tax deductible |
harder to refinance your First Mortgage |
Besides our standard loan programs, we also have a large number of unique programs to serve your needs:
- 100% Financing Options
- Piggyback loans 80-10-10 or 80-15-5. No PMI payments even with 5% or 10% down
- Debt consolidation programs
- Home improvement loans
- Investment property loans
- 2nd home loans
- Tax advantage loans with no PMI
