| YEARS IN HOME |
RECOMMENDED PRODUCT |
| 1-5 |
3/1 ARM, 5/1 ARM, Interest-Only, Negative Amortization, |
| 5-9 |
5/1 & 7/1 ARM, Interest-Only |
| 10-12 |
10/1 ARM, 30- Year Fixed, 15- Year Fixed, 30-Year Interest-Only |
| 12+ |
30-Year Fixed, 15-Year Fixed, 30-Year Interest-Only |
| Mortgage Products |
Pro's |
Con's |
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
|
- Higher rate of interest
- Higher monthly payments
|
Adjustable Rate Mortgages
- 1 Month ARM
- 6 Month ARM
- 1 Year ARM
- 3/1 ARM
- 7/1 ARM
- 10/1 ARM
|
- 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
|
- Riskier in nature
- Payments may go up over time
- Potential for refinance sooner than planned
|
Interest Only
- 3/1, 5/1, 7/1, 10/1 ARMs
- 30-YEAR & 15-YEAR
|
- - Lower initial monthly payments
- More flexibility in size of loan amount/more purchase power
|
- Unless managed properly you may not pay down your principle balance.
|
First time Home Buyer
|
-Many low down to zero down products
- More lenient qualifying
- Interest only options available
|
- May have income or property limitations
- Pre-payment penalties may apply .
|
Stated Income Programs
|
- No verification of income
- Quicker approval process
|
- Slightly higher rates of interest
- Higher down payment/equity required
|
Challenged Credit Products
|
- Short term credit re-establishment
- Utilize short term loan products to consolidate consumer debt
|
- Higher interest rates
- Shorter term ARMs
- Pre-payment penalties may apply
|
No Points or Fees Products
|
No closing costs
- Less money due at closing
- No additional principle on a refinance
|
- Much higher interest rates
- Higher mortgage payments
|
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
|
- - Rate is usually attached to going prime rate and therefore changes often
- Payments will vary monthly
|
Negative Amortization Loans
|
-Allows you to skip a payment if necessary without any delinquencies on your credit
|
- You may end up owing more on your loan than what the property is worth
|
Second Homes
|
-Purchasing a place to vacation
-Write off the mortgage interest
-Interest-only options available
|
|
Investment / Non Owner Properties
|
-Take advantage of low interest rates to purchase a property to rent out
|
|
