Years you plan to stay in home

 Best program

1-3 years
3-5 years
5-7 years
7-10 years
10+ years

3/1 ARM 1 year ARM, 5/1 ARM, 7/1 ARM, 10/1 ARM, 30 year fixed or 15 year fixed

 

 Program


 Pros


 Cons


Fixed Rate Mortgages

  • 30 Year fixed
  • 15 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

  • 10/1 ARM
  • 7/1 ARM
  • 5/1 ARM
  • 1 year ARM
  • Lower initial monthly payment
  • Lower payment over a shorter period time
  • Rates and payments may go down if rates improve
  • May qualify for higher loan amounts
  • More risk
  • Payments may change over time
  • Potential for high payments if rates go up
First Time Buyers
  • Lower Down payment
  • Easier to qualify
  • Sometimes you may get lower rates
  • May be subject to income and property value limitations
  • Some programs which have government subsidies may have a recapture tax if you sell the house too early
No point, No fee Programs
  • No closing costs
  • Less money required to close
  • Higher rates
  • Higher payments

VA Home Loans

Chapter 1

Chapter 2

Chapter 3

 

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