Loan Program |
Advantages |
Disadvantages |
Good for You if... |
30-Year Fixed Mortgage |
- Fixed monthly payment
- Security in fluctuating market
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- Total interest paid could be higher than adjustable rate or 15-year fixed mortgages
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- You like the security of a fixed monthly mortgage payment
- You plan to stay in your home for at least 7 years
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15-Year Fixed Mortgage |
- Fixed monthly payment
- Security in fluctuation market
- Significant interest savings & faster equity gain in your home
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- Higher monthly mortgage payments than 30-year loans
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- You like the security of a fixed monthly payment
- You can afford a higher monthly payment and would like to pay off your home mortgage faster to free up money for future expenses such as retirement or college tuition
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Adjustable Rate Mortgage (ARM) |
- Low initial interest mortgage rates & lower monthly payments
- Ability to qualify for a larger home loan amount
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- Risk of payment increase in rising interest rate markets while rate is adjustable
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- You plan to move out of your home or refinance before the fixed period expires
- You have credit issues or need to qualify for a larger home loan amount than you can qualify for with a fixed mortgage
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Option ARM |
- Very low initial interest mortgage rate
- Possibility of significant interest savings
- Monthly payment options (minimum payment, interest-only payment, fully-amortized payment)
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- Mortgage rate begins to adjust after one month
- Possibility for negative amortization if only the minimum payments are made
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- You want a lower monthly mortgage payment with payment options
- You have a home in a highly appreciating area
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Home Equity Loan (Second Mortgage) - Fixed Rate |
- Fixed monthly mortgage payment
- Home loan Interest rates are much lower than credit cards and the interest may be tax deductible
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- Ties up a portion of your home equity
- Higher mortgage interest rate than first mortgages
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- You want to use the equity in your home to pay for things such as debt consolidation, college tuition or home improvement with the security of a fixed monthly rate and payment
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Home Equity Line of Credit - Adjustable Rate Mortgage |
- Ability to draw funds only when you need them and only pay interest on the amount you use
- Mortgage interest rates are much lower than credit cards and the interest may be tax deductible
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- Ties up a portion of your home equity
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- You want to use the equity in your home to pay for things such as debt consolidation, college tuition or home improvement with the ability to draw funds as you need them
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VA Loan |
- Low down payment & closing costs
- Lower home mortgage interest rates than typical fixed-rate mortgages
- Available as a fixed-rate mortgage or 3/1 ARM
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- May not be the best benefit for your situation, be sure to discuss your options with your mortgage consultant
- More paperwork required
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FHA Loan |
- Low down payment & closing costs
- Flexibility with credit issues
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- Restricted mortgage loan amounts
- Upfront & monthly mortgage insurance regardless of LTV
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- You are a first time homebuyer willing to purchase a home within the loan limits (your mortgage consultant can provide loan limit information for you)
- You have little to no down payment
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