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Loan Types |
Advantages |
Disadvantages |
Fixed
Rate Mortgages
- 30 year fixed
25 year fixed
15 year fixed
10 year fixed
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- Monthly payments are fixed over the life of the loan.
Generally no prepayment penalties
- Interest rate does not change
- Protected if rates go up
- You may refinance if rates go down
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Rate does not drop if interest rates improve
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| ARMS |
- Lower initial monthly payment
- Lower payment over a shorter period of time
- Rates and payments may go down if rates improve
- May qualify for higher loan amounts
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More risk
Payments may change over time
Potential for high payments if rates go up
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(Additional) ARMS |
- Some Offerings with Negative Amortization, Lowest Payments
- FHA 1 Year Arm
- 6 Month Arm, 1 Year Arm, 3 Year Arm, 5 Year Arm, 7 Year Arm
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First Time Buyer Programs |
- Grant Funds Available with NO Repayment Requirement
- Lower Down Payment Requirements
- Easier to qualify
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• None |
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| Stated
Income/No Doc |
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- Generally, slightly higher down payment
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| No
points, No closing costs |
- Less Money Required To Close
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- Rate may be slightly higher
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| Less
Than Perfect Credit |
- High Potential for reestablishing credit.
- 100's of Programs
- You Can Get A Home
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- Higher rates
- Terms may not be as favorable
- Harder to get long term fixed loans
- Loans may have prepayment penalties
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Home Equity Line of Credit |
- Write a Check for What You Need.
- Pay interest only on what you borrow.
- Pay the Principal as You Wish
- Immediate access to funds
- Interest may be tax deductible
- No Point No Closing Costs
- No Balance Required
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Not Many
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