Loan Programs
There are many loan programs to fit almost any need. Please call and ask which loan program best fits your situation.
Recommended Programs
Use the information below to choose the best program for your need.
| Years you plan to stay in the house: |
Recommended Program(s): |
|---|---|
| 1 – 3 | 3/1 ARM, 1 year ARM or 6 month ARM |
| 3 – 5 | 5/1 ARM |
| 5 – 7 | 7/1 ARM |
| 7 – 10 | 10/1 ARM, 30 year fixed or 15 year fixed |
| 10+ | 30 year fixed or 15 year fixed |
- 15-Year and 30-Year Fixed Rate
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Payment and rate stay the same from start to finish plus tax.
- 5 and 7 Year Balloons
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Lower start rate. Some of the balloon programs may be converted to an adjustable rate or a fixed rate after the 5 or 7 years, with very low fee and attractive rate.
- Adjustable Rate Mortgage (ARM)
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Lowest start rate Adjusts either every 6 months or every 12 months depending on program and grade and is based on the economy 6% ceiling for prime and 7% ceiling for sub-prime.
- 5/1 and 7/1 Fixed Rate
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Rate is fixed for the first 5 or 7 years, then shifts to an adjustable rate mortgage (ARM).
- 2/28 and 3/27 ARM
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An ARM program that is fixed for the first 2 or 3 years, then shifts into a 6 month adjustable rate mortgage. It is a sub-prime program giving you a rate lower than the sub-prime 30-year fixed, and if you have had credit problems, it allows a window of time for credit rebuilding and seasoning. You will then want to refinance this loan.
Which Program is best for me?
Here are a few things to keep in mind when selecting a loan program.
| 15-Year and 30-Year Fixed Rate | ||
|---|---|---|
| Advantages: | Disadvantages: | |
|
Maximum interest deduction for taxes, sometimes easier to qualify, stable predictable payments, high loan to value, lower down payment, possible secondary financing if needed.
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Pay more interest over the life of the loan, higher starting interest rate, Lower debt ratio (Larger Income to qualify) Higher monthly payment.
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| 5 and 7 Year Balloons | ||
|---|---|---|
| Advantages: | Disadvantages: | |
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Lowest starting interest rates help qualify for higher loan amounts. If you plan to sell within 2-3 years. If you expect your income to increase.
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Periodic payment and rate increases, builds equity Slower payment increases may affect budget.
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| Adjustable Rate Mortgage (ARM) | ||
|---|---|---|
| Advantages: | Disadvantages: | |
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Lower starting rate than 30 year fixed. Great for refinancing from a higher rate use when you plan a move in 5-7 years. Some are convertible to 30-yr fixed or a treasury ARM, low fees, good rates.
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Loan Balance Due can Change Long Term Financial Planning If You Plan to Live There Over 7 Years.
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