6 Of The Most Popular Mortgage Options

1) 30-year conventional fixed rate loan

  Benefits include:

-Monthly payments for principle and interest remain the same over the life of the loan (no surprises)

-Lower monthly payments when amortized over a 30-year payment period (360 payments)

2) 15-year conventional fixed rate loan (also available in 10 & 20-year payment schedules)

  Benefits include:

-Monthly payments of principle and interest remain the same over the life of the loan

-Substantial savings of interest over the life of the loan

-Payments are approximately 25-30% higher when amortized over a shorter period of time (15-year amortization vs. a 30-year amortization)

3) No-point/ zero closing cost loans

  Benefits Include:

-Less cash needed at closing.  The interest rate will usually be 1/2 to 3/4 of a percent higher when compared to loans that have points to pay at closing

4) 7-year fixed rate balloon with a 30-year amortization

Benefits Include:

-Slightly lower rate and/or less fees than the conventional 30-year fixed rate loan

-Payment of principle and interest remains the same over the 7-year period of time

 *At the end of 7 years, you will need to pay off the remaining balance with either a lump sum of cash or re-finance the remaining loan amount

5) Adjustable rate mortgages (ARM) 

There are many options with adjustable rate mortgages; the most popular tends to be the 1-year adjustable rate mortgage with a 30-year amortization schedule

  Benefits Include:

-Lower interest rate for the 1st year

-Easier to qualify for the loan amount

-You can qualify for a larger loan amount

-In a market when rates are going down, a year ARM offers the ability to adjust downward at the 1 year anniversary of your loan

6) Federal housing administration (FHA)

There are many loan products available

-Easier to qualify for loan programs than conventional financing

-Less down payment needed

Bruce Webb, Associate Broker, Coldwell Banker Preferred

bruce@brucewebb.com

www.brucewebb.com

(734) 392-6021