- 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
- 20 year fixed
- 10 year fixed
- Rate does not drop if interest rates improve
Adjustable Rate Mortgages
• 10/1 ARM
• 7/1 ARM
• 3/1 ARM
• 1 year ARM
• 6 month ARM
• 1 month ARM
- Lower initial monthly payment
- Lower payments over a shorter period of time
- Rates and payments may go down if rates improve
- May allow you to qualify for a higher loan amount as rates are normally lower than fixed rates
- Payments may change over time
- Potential for high payments if rates go up
Balloon Mortgage
• 7 year
• 5 year
- Lower initial monthly payment
- Lower payments over a shorter period of time
- Many balloon mortgages offer the option to convert to a new loan after the initial term
First Time Buyers Programs
- 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
