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Fixed-Rate Mortgage 30 Years Fixed If you expect to stay in your home for ten or more years, this is the loan program for you. Interest rate is fixed for thirty years so you won't have to worry about fluctuating interest rates. You are protected if rates go up and if they do go down, you always have an option to refinance to get a lower rate. 15 Years Fixed Do you want to pay off your mortgage fifteen years earlier than usual? Having a 15-year fixed loan will give you a slightly lower interest rate but your monthly payment will definitely be higher compared to having 30-years fixed. With 15-years fixed loan, at least you save on time paying for your mortgage and interest costs. Adjustable-Rate Mortgage (ARM) This is the most popular loan program for first time home buyers. Why? It’s easier to qualify for a loan, you have lower initial monthly payments, and one may qualify for a higher loan amount. ARM is good for those who expect to move within five years. Better be careful though, interest rates may rise and fluctuate. Payments may be higher after a period of time. Home Equity Loan Having a home equity loan may be good for you if you have certain debts to pay off. The payments are fixed and the interest may also be tax deductible. The interest rate will most probably be higher than your first mortgage. It may be harder than usual to refinance your first mortgage if you have a home equity loan. Home Equity Line of Credit If you need access to funds immediately and have a home equity line of credit open, you may borrow what you need. You pay interest only on what you borrow and that interest may be tax deductible. Rates may change every now and then and just like Home Equity Loan, it may also be hard to refinance your first mortgage. LOAN PROGRAMS Stated Income If you want a faster loan approval, you may want to think about doing a Stated Income Program. We do not need to verify your income but you'll have higher interest rate and therefore having higher monthly mortgage payment. Full Documentation From the words itself, having a full documentation program will require you to give tax returns, W2s, bank statements, etc. If you get approved for a full doc program, your interest rate will be lower than stated income program and you will have lower monthly mortgage payment. |
