The Most Popular Mortgage Options

1. 30-Year Conventional Fixed Rate Loan

Benefits include:

  • Monthly payments for principle and interest remain the same over the life of the loan(no surprises)
  • Lower monthly payments when amortized over a 30-year payment period (360 payments)

 2. 15-Year Conventional Fixed Rate Loan (also available in 10 & 20-year payment schedules)

Benefits include:

  • Monthly payments of principle and interest remain the same over the life of the loan (no surprises)
  • Substantial savings of interest over the life of the loan (example: $100,000 loan at 8% amortized over a 30-year period the total interest paid is $164,166.27. The same loan amount, same interest rate amortized over a 15-year period is $72,017.41. The money saved in interest is $92,148.86.)
  • Payments are approximately 25-30% higher when amortized over a shorter period of time (15-year amortization vs.a 30-year amortization)

 3. No-Point / Zero Closing Cost Loans

Benefits include:

  • Less cash needed at closing. The interest rate will usually be 1/2 to 3/4 of a percent higher when compared to loans that have points to pay at closing

 4. 7-Year Fixed Rate Balloon with a 30-Year Amortization

Benefits include:

  • Slightly lower rate and/or less fees than the conventional 30-year fixed rate loan
  • Payment of principle and interest remains the same over the 7-year period of time

*Remember, at the end of the 7 years, you will need to pay off the remaining balance with either a lump sum of cash or re-finance the remaining loan amount

 

5. Adjustable Rate Mortgages (ARM)

There are many options with adjustable rate mortgages; the most popular tends to be the 1-year adjustable rate mortgage with a 30-year amortization schedule.

Benefits include:

  • Lower interest rate for the 1st year
  • Easier to qualify for the loan amount
  • You can qualify for a larger loan amount
  • In a market when rates are going down, a year ARM offers the ability to adjust downward at the 1 year anniversary of your loan

6. Federal Housing Administration (FHA)

There are many loan products available

  • Easier to qualify for loan programs than conventional financing
  • Less down payment needed

 I would be happy to discuss the various options with you and help you determine which loan program best fits your personal situation.