Different Loan Programs
Which loan is right for you? This quick and easy guide will help
you through the process of choosing the right loan for your
needs.
FIXED RATE MORTGAGES
30 year fixed - 15 year fixed
ADVANTAGES
* Monthly payments are fixed over the life of the plan
* Interest rate does not change
* Protected if rates go up
* Can refinance if rates go down
DISADVANTAGES
* Higher interest rates
* 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 months ARM - 1 month ARM
ADVANTAGES
* Lower initial monthly payments
* Lower payment over a shorter period of time
* Rates and payments may go down if rates improve
*May qualify for higher loan amounts
DISADVANTAGES
* More risk
* Payments may change over time
* Potential for high payments if rates go up
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
BALLOON MORTGAGES
7 year - 5 year
ADVANTAGES
* 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
DISADVANTAGES
* Risk of rates being higher at the end of the initial fixed period
* Risk of foreclosure if you cannot make balloon payment of if
you cannot refinance or if you cannot exercise the conversion
option
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
FIRST TIME BUYER PROGRAMS
ADVANTAGES
* Lower down payment
* Easier to qualify
* Sometimes you may get lower rates
DISADVANTAGES
* May be subject to income and property value limitations
* Some programs which have government subsidies may have a
recapture tax if you sell the house too early
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
STATED INCOME PROGRAMS
ADVANTAGES
* Don't need to verify income
* Faster approval
DISADVANTAGES
* Higher rates
* Higher down payment
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
NO POINT, NO FEE PROGRAMS
ADVANTAGES
* No closing costs
* Less money required to close
DISADVANTAGES
* Higher rates
* Higher payments
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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
DISADVANTAGES
* Rates can change. The maximum interest rate is normally high
* Payments can change
* Harder to refinance your first mortgage
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
HOME EQUITY FIXED LOAN
ADVANTAGES
* Fixed payments
* Interest may be tax deductible
DISADVANTAGES
* Higher interest rates than on 1st mortgage
* Harder to refinance your 1st mortgage
you through the process of choosing the right loan for your
needs.
FIXED RATE MORTGAGES
30 year fixed - 15 year fixed
ADVANTAGES
* Monthly payments are fixed over the life of the plan
* Interest rate does not change
* Protected if rates go up
* Can refinance if rates go down
DISADVANTAGES
* Higher interest rates
* 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 months ARM - 1 month ARM
ADVANTAGES
* Lower initial monthly payments
* Lower payment over a shorter period of time
* Rates and payments may go down if rates improve
*May qualify for higher loan amounts
DISADVANTAGES
* More risk
* Payments may change over time
* Potential for high payments if rates go up
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
BALLOON MORTGAGES
7 year - 5 year
ADVANTAGES
* 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
DISADVANTAGES
* Risk of rates being higher at the end of the initial fixed period
* Risk of foreclosure if you cannot make balloon payment of if
you cannot refinance or if you cannot exercise the conversion
option
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
FIRST TIME BUYER PROGRAMS
ADVANTAGES
* Lower down payment
* Easier to qualify
* Sometimes you may get lower rates
DISADVANTAGES
* May be subject to income and property value limitations
* Some programs which have government subsidies may have a
recapture tax if you sell the house too early
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
STATED INCOME PROGRAMS
ADVANTAGES
* Don't need to verify income
* Faster approval
DISADVANTAGES
* Higher rates
* Higher down payment
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
NO POINT, NO FEE PROGRAMS
ADVANTAGES
* No closing costs
* Less money required to close
DISADVANTAGES
* Higher rates
* Higher payments
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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
DISADVANTAGES
* Rates can change. The maximum interest rate is normally high
* Payments can change
* Harder to refinance your first mortgage
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
HOME EQUITY FIXED LOAN
ADVANTAGES
* Fixed payments
* Interest may be tax deductible
DISADVANTAGES
* Higher interest rates than on 1st mortgage
* Harder to refinance your 1st mortgage
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| GOVERNMENT ALLOWANCE PROGRAMS AVAILABLE AT THIS TIME. CALL TEXAS REAL ESTATE AND LET US EXPLAIN TO YOU ABOUT THE FIRST TIME HOME BUYERS $8000.00 ADVANTAGE. ALSO, PREVIOUS HOME OWNERS: MOVE UP! NOW GET UP TO $6500.00 CREDIT WITH THE PURCHASE OF A NEW HOME. THESE PROGRAMS WON'T LAST LONG SO CALL TODAY! CALL TRESA McMILLAN @ 325-207-8555. |
| TRESA MCMILLIAN OWNER/ BROKER |