WHICH LOAN IS RIGHT FOR ME?

Years you plan to stay in the house Recommended program
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
Loan Programs Advantages Disadvantages
30 year fixed
15 year fixed

  • Monthly payments are fixed

  • Interest rate does not change

  • Lower initial monthly payment

  • Rate does not drop if interest rates improve
Adjustable Rates
10/1 ARM
7/1 ARM
3/1 ARM
1 year ARM
6 month ARM
1 month ARM

  • 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 change over time

  • Potential for high payments if rates go up

First Time Buyer Programs
  • Low down payment
  • Easy to qualify
  • 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

  • Don’t need to verify income

  • Faster approval

  • Higher rates

  • Higher down payment
No point, No fee Programs

  • No closing costs

  • Less money required to close

  • Higher rates

  • Higher payments