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YEARS IN HOME
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RECOMMENDED PRODUCT
|
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1-5
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3/1 ARM, 5/1 ARM, Interest-Only, 30 Year Fixed |
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5-9
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5/1 & 7/1 & 10/1 ARM, Interest-Only , 30 Year Fixed |
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10-12
|
10/1 ARM, 30- Year Fixed, 15- Year Fixed, 30-Year Interest-Only |
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12+
|
30-Year Fixed, 15-Year Fixed, 30-Year Interest-Only |
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Mortgage Products
|
Pro's
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Con's
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Fixed Rate
-30 Year Fixed
-20 Year Fixed
-15 Year Fixed
-10 Year Fixed |
- Fixed payments over life of loan
- Rate of interest does not change
- Protection against increase in rates
- No penalty to refinance if rates drop
|
- Higher rate of interest
- Higher monthly payments
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Adjustable Rate Mortgages
- 1 Year ARM
- 3/1 ARM
- 7/1 ARM
- 10/1 ARM
|
- Lower initial monthly payments
- More flexibility in size of loan amount
- After initial start period, rates may go down based on market
- Interest only options available
|
- Riskier in nature
- Payments may go up over time
- Potential for refinance sooner than planned
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Interest Only
- 3/1, 5/1, 7/1, 10/1 ARMs
- 30-YEAR & 15-YEAR
|
- Lower initial monthly payments
- More flexibility in size of loan amount/more purchase power
|
- Unless managed properly you may not pay down your principle balance.
|
First time Home Buyer |
- Many low down to zero down products
- More lenient qualifying
- Interest only options available |
|
- May have income or property limitations
- Pre-payment penalties may apply |
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No Points or Fees Products |
- No or low closing costs
- Less money due at closing
- No additional principle on a refinance |
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- Much higher interest rates
- Higher mortgage payments |
|
Home Equity Lines of Credit /2nd Mortgages |
- Potentially Write off the interest from
your credit line
- Only pay on portion you utilize
- Easy access to funds
- Payments decrease as you make principle reductions |
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- Rate is usually attached to going prime rate and therefore changes often
- Payments will vary monthly |
|
Second Home |
- Purchase a place to vacation
- Potentially write off the mortgage interest
- Interest only options available
|
|
Investment / Non Owner Properties |
-Take advantage of low interest rates to purchase a property to rent out
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