Loan Programs

Loan Program Advantages Risks
Fixed Rate Mortgages

  • 30 year fixed
  • 20 year fixed
  • 15 year fixed
  • 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
  • Higher interest rate
  • Higher mortgage payments
  • Rate does not drop if interest rates improve
Adjustable Rate Mortgages (ARM)

  • 10/1 ARM
  • 7/1 ARM
  • 5/1 ARM
  • 3/1 ARM
  • 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
  • No pre-payment penalty
  • More risk
  • Payments may change over time
  • Potential for higher payments if rates increase
First Time Buyer Programs

  • FHA
  • HomePath
  • VA
  • Conventional
  • Lower down payment
  • Easier to qualify
  • May be subject to income and property value limitations
  • Credit worthiness
  • Education courses may be required to qualify for these loans
Specialty Loan Programs
HomePath
  • 3% down payment for owner/occupant purchase
  • 10% down payment for investor purchases
  • No mortgage insurance required
  • No appraisal required
FHA 203K
  • Allows for home improvements to be financed in the initial loan
  • Upgrade the kitchen, air conditioner, paint and carpeting
VA
  • $0 down payment
FHA 5/1 ARM
  • Maximum of 1% increase in year 6and thereafter
Reverse Mortgage
  • For borrowers 62 years of age and older
  • Can replace an existing loan
  • Access cash from current equity or buy a new home of greater value and have no mortgage payment for the life of the borrower