| Loan
Program |
Advantages
|
Disadvantages
|
| Fixed
Rate Programs |
30 year fixed
15 year fixed fixed
10/1 fixed
7/1 fixed
5/1 fixed
3/1 fixed
2 year fixed
|
Monthly payments are fixed over the life of loan.
Interest rated 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. |
| |
|
|
| Short-Term
Fixed Rate, Adjustable, & Interest Only Mortgages |
10/1 Arm
7/1 Arm
5/1 Arm
3/1 Arm
2 year Arm
1 year Arm
6 month Arm
1 month Arm
Option Arm
|
Lower initial monthly
payments.
Lower payment over a
shorter period of time.
Rates and payments may
go down if rates
improve after fixed
period.
May qualify for higher
Loan amounts.
Pay interest only if desired.
|
Potential rate increase
After fixed period.
Payments may change
Over time.
Potential for high
go payments if rates go up.
|
