Fixed Rate Mortgages
- 30 year fixed
- 15 year fixed
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Advantages
- 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 down
Disadvantages
- Higher interest rate
- Higher mortgage payments
- Rate does not drop if interest rates improve
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Adjustable Rate Mortgages (ARM)
- 10/1 ARM
- 7/1 ARM
- 5/1 ARM
- 3/1 ARM
- 1 year ARM
- 6 month ARM
- 1 month ARM
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Advantages
- Lower initial monthly payment
- Rates and payments may go down if rates improve
- May qualify for higher loan amounts
- 30 year term, no balloon payment
Disadvantages
- More risk
- Payments may change over time
- Potential for higher payments if rates increase
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| FHA | Advantages
- Owner Occupied
- R&T to 97.75% LTV
- Cash-out to 85% LTV
- SFR, 1-4 Units, Condo's
- 640 Minimum Fico
- No DTI Limits if DU Approved
- No Reserve Reqmts
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| FHA STREAMLINE REFI | Advantages
- 640 Minimum Fico
- No Appraisal Required
- No Maximum CLTV
- income Docs Not Required
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| FHA HIGH BAL STREAMLINE | Advantages
- Owner Occupied
- 660 Minimum Fico
- SFR, 1-4 Units, Condo's
- No Appraisal Required
- income Docs Not Required
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| VA | Advantages
- Owner Occupied
- 100% LTV on Purchase
- Cash-out to 90% LTV
- SFR, 1-4 Units, PUD,Condo's
- 620 Minimum Fico
- Full Doc
- up to 50% DTI
- No Reserve Reqmts.
- $50k Minimum Loan Amount
- up to $417k Max Loan Amount
- Gift Funds Allowed
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| First Time Buyer Programs |
Advantages - Lower down payment
- Easier to qualify
- Lower rates may be available
Disadvantages
- May be subject to income and property value limitations
- Some government subsidized programs may generate a recapture tax if you sell the house too soon
- Education courses may be required to qualify for these loans
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Homepath
- Owner Occupied
- Non-Owner Occupied
- Other
See
www.homepath.com
for more details |
Owner Occupied
- Purchase to 95% LTV
- SFR, 1-4 Units, Condo's
- No Mortgage Insurance
- Max DTI 50%
- 620 Minimum Fico
Non-Owner Occupied
- Purchase to 85% LTV
- SFR, 1-4 Units, Condo's
- 620 Minimum Fico
- Max DTI 50%
- No Mortgage Insurance
Other
- Minimum $50k Loan amount
- Full Doc
- DU Approvals Accepted
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| Stated Income Programs |
Advantages - income completed by employer only
- Faster approval
- Good for borrowers who may not qualify with a full income documentation program
Disadvantages
- Higher rates
- Higher down payment
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| No point, No fee Programs |
Advantages - No out-of-pocket loan costs at closing
- Closing costs are paid from the lender rebate
- Less money required to close
- Refinance without increasing your loan amount
Disadvantages
- Higher rates
- Higher payments
- Some lenders may have a short payoff penalty which is usually charged to the loan broker, but may be passed on to you
- Some require a prepayment penalty for the first one to five years
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| Imperfect Credit Programs |
Advantages - Potential for reestablishing credit if you pay your mortgage on time
- When used for debt consolidation, you may be able to reduce your monthly debt payment
Disadvantages
- Higher rates
- Terms may not be as favorable
- Harder to get long-term fixed loans
- Loans may have prepayment penalties
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| Home Equity Line of Credit |
Advantages - You only borrow what you need
- Pay interest only on what you borrow
- Flexible access to funds
- Interest may be tax deductible
- May be free of closing costs
- A good source for an emergency fund, if set up in advance
- Can be used for debt consolidation and lower payments
- Rates are usually lower than consumer loan or credit card rates
Disadvantages
- Rates can change. The maximum interest rate can be relatively high
- Payments can change
- Harder to refinance your first mortgage
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| Home Equity Fixed Loan |
Advantages - Fixed payments
- Interest may be tax deductible
- Get cash out for any purpose
Disadvantages
- Higher interest rates compared to first mortgage
- Harder to refinance your first mortgage
- Interest is paid on the entire loan amount, compared to an equity line of credit
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