First or Second mortgage loans that are paid off over the entire term of the loan
|
- Fixed interest rate and monthly payment over the entire term of the loan
- Higher interest rate and monthly payment than intermediate fixed-ARM or adjustable rate loan
|
- Do not plan to sell or refinance for 10+ years.
- Prefer the security of having the same monthly payment with no pressure to refinance later
- Have good credit, income, and assets to qualify for lowest rates
|
These loans have a lower initial fixed rate than long-term loans and may also provide the option to make the "interest-only" payments during the initial fixed period. These are also known as "2-step" loans because they are both fixed and adjustable over the tem of the loan.
|
- Interest rate and monthly payment remain the same during the initial fixed term
- After the term expires, the loan converts to an adjustable rate mortgage based on a predetermined index and margin. Unless the loan is refinanced (or the property is sold), the interest rate and payment will change periodically thereafter
- May provide the option to make interest-only payments during the initial fixed period.
|
- Want a lower interest rate and monthly payment than a Long-Term Fixed Rate Loan
- Are confident you'll sell or refinance again within a matter of years
- Need a lower interest rate to qualify, or the option of making interest-only payments
- Need the loan to continue even if you don't sell or refinance after the initial fixed period, and don't mind having an adjustable loan as long as the payment is OK.
- Do not want to be forced to sell or refinance at the end of the term as you would if you had a "balloon" mortgage
|
These 30-year loans typically have a lower interest rate than fixed rate loans of similar term. They adjust periodically in relation to an Index. Adjustable Rate Mortgages are gaining in popularity due to low rates and rising home prices.
|
- Typically lower starting interest rates and monthly payments than fixed-rate loans.
- Can be a less-costly alternative to a fixed-rate loan over a period when interest rates are stable or declining.
- May provide the option to make interest-only monthly payments
|
- Want the lowest possible interest rate and monthly payment available.
- Don't mind if your rate and payment change periodically.
- Need a mild payment for a short-term on a large loan amount.
- Want to maximize cash flow on an investment property
- Have good to excellent credit and sufficient down-payment or equity to qualify.
- Can be structured as a "negative amortization" loan with flexible monthly payment options.
|
Allows cash out in a lump sum at a fixed rate for the term of the loan
|
- Cash for debt consolidation, home improvements, emergency funds, education, an more
- Available up to 125% of the value of the home
- Can be applied as a separate loan or obtained with a purchase money first mortgage to avoid mortgage insurance
|
- Want more flexibility to borrow and repay than a conventional second mortgage
- Need a lower monthly payment then a conventional second mortgage
- Can be used in conjunction with a new first mortgage for less-costly, high loan-to-value financing
- Have "good" or better credit to qualify
|
So-called "non-prime" loans are an option for borrowers, especially when credit, income, employment, or other factors prohibit from qualifying for a "prime" loan program.
|
- Provides an opportunity to enjoy the benefits of home ownership with less than ideal qualifications
- Wider variety of loans, rates, and lenders than ever before- "non-prime" loans account for a large percentage of loans today
- May contain a prepayment penalty where allowed by law
- Mortgage insurance on loans over 80% not required
|
- Want to own a home but don't qualify for the lowest rate or best terms right now
- Need to re-establish yourself after a bankruptcy, divorce, job loss, etc.
- Can afford to pay a little more for the short term for the benefit of owning a home
|
|
Which Loan is Right for You?
Tools, Guides, & Answers
Calculators
|
