Which Loan?

Loan types

A wide variety of mortgage loans are currently available.
The challenge is to select the loan that works best for you!

Purchase money for

	A primary residence
	Investment properties like a duplex, tri-plex, or four-plex
	A second home
	Refinances
	Debt consolidation

Fixed Rate
Traditionally the most popular type of mortgage, borrowers enjoy the comfort and security of a fixed rate and payment. Longer term fixed rate mortgage loans, like the traditional 30-year fixed rate loan, offer the most affordable fixed rate option. This mortgage loan may be ideal if you plan to remain in your home for years. Shorter terms, like the 15-year fixed rate loan allow you to build equity in the home faster and save interest expense. Recently, 40 year loans have become available.

Adjustable-Rate
With an adjustable-rate mortgage (ARM), the interest rate you pay is adjusted periodically to keep it in line with the changing market rates. This means when interest rates go up, your monthly mortgage payments may go up as well. On the other hand, when interest rates go down, your monthly mortgage payments may also go down. ARMs are attractive because they may initially offer a lower interest rate than fixed rate mortgages. The chief drawback is that your monthly payments may increase when interest rates rise.

You may want to consider an ARM if:

	your income will rise enough in the coming years to comfortably handle any potential increase in payments,
	you plan to sell or move in a few years and therefore are not concerned about possible interest rate increases,
	you need a lower initial rate to afford the property you want and you'll re-finance later.

A typical ARM will adjust annually, have a yearly cap on interest rate increases and a lifetime interest rate cap. The interest rate changes on an ARM are always tied to a financial index, such as the average interest rate on Treasury bills. For more information about ARM's

Initial Fixed Rate - ARM
You may want to consider a special type of ARM that does not adjust your interest rate until several years after you take out the loan. You can get a three-, five-, seven-, or ten-year fixed period ARM. This means your interest rate would be the same the first three, five, seven or ten years and then, at the end of your chosen fixed rate period, the interest rate would adjust every year. This type of mortgage generally starts with a rate lower than standard fixed rate loans, and protects you against rapid interest rate increases in the early years of the loan.

Government Loans
The Federal Housing Administration (FHA) and the U.S. Department of Veterans Affairs (VA) are agencies that offer government-insured loans. To obtain these loans you apply through a lender that is approved to handle them. With FHA loans, you can purchase a home with a very low down payment. FHA mortgages have a maximum loan limit that varies depending on the average cost of housing in a given region. The VA guarantee allows qualified veterans to buy a property costing up to $203,000 with no down payment. Also, some of the qualification guidelines for VA loans can be more flexible than those for either a FHA or conventional loan.

HELOC Loans
HELOC stands for Home Equity Line Of Credit. It is a secured loan. Your home equity secures the loan. In many cases with good credit the rates can be quite low. For more information about HELOC's

Balloon Loans
Balloon loans are for those of us who have specific periods of time that we will need a loan, We might want to buy a home for the short term and sell It soon or we might have to take cash out of an existing, fix the home and soon sell the home for a profit. For more information about Balloon Loans,

A Word About Pre-Payment Penalties
For common LOAN LIMITS

For a Glossary of Loan Terms