| Loan Programs |
Advantages |
Disadvantages |
| |
| Fixed Rate Mortgages |
30 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 |
7/6 ARM
5/6 ARM
3/6 ARM |
- Lower initial monthly payment
- Lower payment over a shorter period of time
- Rates and payments may go down if rates improve
- May qualify for higher loan amounts
|
- More risk
- Payments may increase over time
- Potential for high payments if rates go up
|
|
| First Time Buyer Programs |
| |
- Lower down payment
- Easier to qualify
- Lower rates may be available
|
- 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.
|
|
