| Loan Program | Advantages | Disadvantages |
Fixed Rate Mortgages
- 30 year fixed
- 20 year fixed
- 15 year fixed
- 10 year fixed
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- 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
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- Higher interest rate
- Higher mortgage payments
- Rate does not drop if interest rates improve
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| Loan Program | Advantages | Disadvantages |
Adjustable Rate Mortgages
- 10/1 ARM
- 7/1 ARM
- 5/1 ARM
- 3/1 ARM
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- 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
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- More risk
- Payments may change over time
- Potential for higher payments if rates increase
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| Loan Program | Advantages | Disadvantages |
| Interest Only Programs |
- You have several payment options
- Lower monthly payments
- Option to pay the full normal payment
- Interest only payments for up to ten years
|
- Higher rates
- Principal loan balance will not decrease during the interest only payment period
- Payment will be higher for the remaining term
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| Loan Program | Advantages | Disadvantages |
| No Points, No Closing Costs Programs |
- No out-of-pocket loan costs at closing
- Closing costs are paid from the lender rebate
- Less money required to close
- Refinance without increasing your loan amount
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- Higher rates
- Higher payments
- Some lenders may have a short payoff penalty which is usually charged to the loan broker, but may be passed on to you
- Some require a prepayment penalty for the first one to five years
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| Loan Program | Advantages | Disadvantages |
| No PMI Programs |
- No PMI payments with 15, 10, or 5% down
- Lower total monthly obligation
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- Higher rates
- Rate is not lowered (unless refinanced) once equity reaches 20%
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