Which loan is right for me?                           

    Years you plan to stay in the house        Recommended program  

                       1-3                                     3/1 ARM, 1 year ARM or 6 month ARM

                       3-5                                     5/1 ARM                                         

                                              5-7                                     7/1 ARM

                                              7-10                                   10/1 ARM, 30 year fixed or 15 year fixed

                                              10+                                    30 year fixed or 15 year fixed

Loan Programs Advantages Disadvantages
Fixed Rate Mortgages
30 year fixed
15 year fixed
bullet Monthly payments are fixed over the life of the loan
bullet Interest rate does not change
bullet Protected if rates go up
bullet Can refinance if rates go down
bullet Higher interest rate
bullet Higher mortgage payments
bullet 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
bullet Lower initial monthly payment
bullet Lower payment over a shorter period of time
bullet Rates and payments may go down if rates improve
bullet May qualify for higher loan amounts
bullet More risk
bullet Payments may change over time
bullet Potential for high payments if rates go up
Balloon Mortgages
7 year
5 year
bullet Lower initial monthly payment
bullet Lower payment over a shorter period of time
bullet Many balloon mortgages offer the option to convert to a new loan after the initial term.
bullet Risk of rates being higher at the end of the initial fixed period
bullet Risk of foreclosure if you cannot make balloon payment or if you cannot refinance or if you cannot exercise the conversion option
First Time Buyer Programs
bullet Lower down payment
bullet Easier to qualify
bullet Sometimes you may get lower rate
bullet May be subject to income and property value limitations
bullet Some programs which have government subsidies may have a recapture tax if you sell the house too early.
Stated Income Programs
bullet Don't need to verify income
bullet Faster approval
bullet Higher rates
bullet Higher down payment
No point, No fee Programs
bullet No closing costs
bullet Less money required to close
bullet Higher rates
bullet Higher payments
Imperfect Credit Programs
bullet Potential for reestablishing credit if you pay your mortgage on time.
bullet When used for debt consolidation, you may be able to reduce your monthly debt payment
bullet Higher rates
bullet Terms may not be as favorable
bullet Harder to get long term fixed loans
bullet Loans may have prepayment penalties
Home Equity Line of Credit
bullet You only borrow what you need
bullet Pay interest only on what you borrow
bullet Flexible access to funds
bullet Interest may be tax deductible
bullet Rates can change. The maximum interest rate is normally high.
bullet Payments can change
bullet Harder to refinance your first mortgage
Home Equity Fixed Loan
bullet Fixed payments
bullet Interest may be tax deductible
bullet Higher interest rates than on 1st mortgages
bullet Harder to refinance your first mortgage
Besides our standard loan programs, we also have a large number of unique programs to serve your needs:
bullet Purchase a house with 0 down
bullet Piggyback loans 80-10-10 or 80-15-5. No PMI payments even with 5% or 10% down.
bullet Debt consolidation programs
bullet Home Improvement loans
bullet Qualify even if you may have been turned down before!

Licensed by the California Department of Real Estate, license # 01227553
Member of the Pacific West Association of Realtors
Send mail to lysa@bankersdirectmortgage.com with questions or comments about this web site.