WHICH LOAN IS RIGHT FOR ME?

Years you plan to stay in the house                       Recommended Programs

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

                                                    ADVANTAGES                            DISADVANTAGES

Fixed Rate Mortgages

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

                                           -can refinance if rates go down           rates improve

                                           -typically, no pre-payment penalty

Adjustable Rate Mortgages

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)

5/25 ARM                             -may qualify for higher loan

                                             amounts

First Time Buyer Programs

                                            -lower down payments                     -may be subject to income

                                            -easier to qualify                               & property value limitations

                                            -you may get lower rate

                                            -seller pay closing costs

Stated Income Programs

                                            -don't need to verify income              -higher rates

                                            -faster approval

                                            -quick closings

Imperfect Credit Programs

                                            -potential for reestablishing               -higher rates

                                             credit if you pay your mortgage        -terms may not be as favorable

                                             on time                                           -loans may have pre-payment

                                            -when used for debt consolidation,      penalties

                                             you may be able to reduce your         

                                             monthly debt

Home Equity Line of Credit

                                             -you only borrow what you need        -rates can change

                                             -pay interest only on what you          - harder to refinance

                                              borrow                                              than 1st mortgage

                                             -flexible access to funds

                                             -interest may be tax deductible (*consult your CPA)

Home Equity Fixed Loan

                                             -fixed payments                               -higher interest rates

                                                                                                     than 1st mortgage

                                             -interest may be tax deductible (*consult your CPA)