Fixed
Rate Mortgages
- 30 year fixed
- 15 year fixe
|
- Monthly payments are fixed
over the life of the loan
- Interest rate does not change
- Protected if rates go up
- Can refinance if rates go do
|
- Higher interest rate
- Higher mortgage payments
- Rate does not drop if interest
rates improve
|
Adjustable
Rate Mortgages
- 10/1 ARM
- 7/1 ARM
- 3/1 ARM
- 1 year ARM
- 6 month ARM
- 1 month ARM
|
- Lower initial monthly payment
- Lower payment over a shorter
period of time
- Rates and payments may go down
if rates improve
- May qualify for higher loan
amounts
|
- More risk
- Payments may change over time
- Potential for high payments
if rates go up
|
Balloon
Mortgages
- 7 year
- 5 year
|
- Lower initial monthly payment
- Lower payment over a shorter
period of time
- Many balloon mortgages offer
the option to convert to a new loan after the initial
term.
|
- Risk of rates being higher
at the end of the initial fixed period
- Risk of foreclosure if you
cannot make balloon payment or if you cannot refinance
or if you cannot exercise the conversion option
|
| Stated
Income Programs |
- Don’t need to verify income
- Faster approval
|
- Higher rates
- Higher down payment
|
