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Which loan is right for me?

Years You Plan To Stay In The Home	Recommended Program

1-3 years	3/1 ARM, 1 year ARM or 6 month ARM
3-5 years	5/1 ARM
5-7 years	7/1 ARM
7-10 years	10/1 ARM, 30 year fixed or 15 year fixed
10+	30 year fixed or 15 year fixed

Compare Mortgage Programs

Loan Program	Advantages	Disadvantages

Fixed Rate Mortgages 15 Year Fixed 30 Year Fixed	Monthly payments are fixed over the life of the loan Interest rate 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


Adjustable Rate Mortgages (ARM) 1 Year ARM 3/1 ARM 5/1 ARM 7/1 ARM 10/1 ARM	Lower initial monthly payment Rates and payments may go down if rates improve May qualify for higher loan amounts 30 year term, no balloon payment	More risk Payment may change over time Potential for higher payments if rates increase


Balloon Mortgages 5 Year 7 Year	Lower initial monthly payment Lower payment for a predetermined period of time Many balloon mortgages offer the option to convert to a new loan after the initial term	Risk of rates being higher at the end of the initial fixed period Risk of foreclosure if you cannot make balloon payment, refinance, or exercise the conversion option Balloon payment requires you to sell or refinance after the term, as opposed to a 7/1 or 5/1 program with a 30 year term


First Time Buyer Programs	Lower down payment Easier to qualify Lower rates may be available	May be subject to income and property value limitations Some government subsidized programs may generate a recapture tax if you sell the house too soon Education courses may be required to qualify for these loans


Stated Income Programs	No need to verify income Faster approval	Higher rates Higher down payment


Interest Only Programs	You have several payment options Lower monthly payments Qualify for a higher loan amount Qualify at the interest only payment	Higher rates Principal loan balance will not decrease during the interest only payment period Payment will be higher for the remaining term


Home Equity Line of Credit	You only borrow what you need Pay interest only on what you borrow	Rates can change. The maximum interest rate can be relatively high Payments can change

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