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Mortgage Products
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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
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- Higher rate of interest
- Higher monthly payments
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Adjustable Rate Mortgages
- 1 Month ARM
- 6 Month ARM
- 1 Year ARM
- 3/1 ARM
- 7/1 ARM
- 10/1 ARM
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- 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
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- 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
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- Lower initial monthly payments
- More flexibility in size of loan amount/more purchase power
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- Unless managed properly you may not pay down your principle balance.
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First time Home Buyer |
- Many low down to zero down products
- More lenient qualifying
- Interest only options available |
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- May have income or property limitations
- Pre-payment penalties may apply |
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Stated Income Programs |
- No verification of income
- Quicker approval process |
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- Slightly higher rates of interest
- Higher down payment/equity required |
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Challenged Credit Products |
- Short term credit re-establishment
- Utilize short term loan products to consolidate consumer debt |
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- Higher interest rates
- Shorter term ARMs
- Pre-payment penalties may apply |
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No Points or Fees Products |
- No closing costs
- Less money due at closing
- No additional principle on a refinance |
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- Much higher interest rates
- Higher mortgage payments |
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Home Equity Lines of Credit /2nd Mortgages |
- 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 |
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Negative Amortization Loans
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-Allows you to skip a payment if necessary without any delinquencies on your credit
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-You may end up owing more on your loan than what the property is worth
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-Purchasing a place to vacation
-Write off the mortgage interest
-Interest-only options available |
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Investment / Non Owner Properties |
-Take advantage of low interest rates to purchase a property to rent out
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