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WHICH LOAN IS RIGHT FOR ME?

Recommended Programs

          Years you plan to stay in the house

1-2  

2/28 ARM

3-5  

3/27 ARM or 5/25 ARM

6+   

10, 15, 20, 25 or 30 Yr. Fixed
 
 
LOAN PROGRAMS
Fixed Rate Mortgages ADVANTAGES DISADVANTAGES
30 Yr. Fixed  -monthly payments are fixed  -higher interest rate 
15 Yr. Fixed   -interest rate doesn't change -higher mortgage payments
  -protected if rates go up -rate does not drop if interest rates improve
  -can refinance if rates go down  
  -typically, no pre-payment penalty  
     
Adjustable Rate Mortgages ADVANTAGES DISADVANTAGES
2/28 ARM -lower initial monthly payment   -payments may change
3/27 ARM -lower payment over a shorter period of time (allows you to rebuild credit) -payments may change
5/25 ARM           -may qualify for higher loan amounts  
     
First Time Buyer Programs ADVANTAGES DISADVANTAGES
  -lower down payments -may be subject to income
  -easier to qualify   
     
Stated Income Programs ADVANTAGES DISADVANTAGES
  -don't need to verify income -higher rates          
  -faster approval  
  -quick closings  
     
Imperfect Credit Programs ADVANTAGES DISADVANTAGES
  -potential for reestablishing credit if you pay your mortgage on time                               -higher rates
  -when used for debt consolidation, you may be able to reduce your monthly debt -loans may have pre-payment penalties
     
Home Equity Line of Credit ADVANTAGES DISADVANTAGES
  -you only borrow what you need        -rates can change
  -pay interest only on what you borrow - harder to refinance than 1st mortgage
  -flexible access to funds  
  -interest may be tax deductible (*consult your CPA)  
            
Home Equity Fixed Loan ADVANTAGES                         DISADVANTAGES
  -fixed payments  -higher interest rates than 1st mortgage
  -interest may be tax deductible (*consult your CPA)