Program | Advantages | Disadvantages |
| Fixed Rate | 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 | Higher interest rate, Higher mortgage payments, Rate does not drop if interest rates improve. |
Adjustable
Rate | Lower initial monthly payment, Lower payment over a shorter period of time, Rates and payments may go down if rates improve, May qualify for higher loan amounts. | More risk, Payments may change over time, Potential for high payments if rates go up. |
| Balloon | Lower initial monthly payment, Lower payment over a shorter period of time, Many balloon mortgages offer the option to convert to a new loan after the initial term. | Risk of rates being higher at the end of the initial fixed period, Risk of foreclosure if you cannot make balloon payment, refinance, or exercise the conversion option.
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Stated
Income | No need to verify income, helps overcome income shortages | Higher rates, Higher down payment |
Imperfect
Credit | Potential for re-establishing your credit if you pay your mortgage on time, When used for debt consolidation you can reduce your monthly debt payment and attain tax deductible interest. | Higher rates, Terms may not be as favorable, Harder to get long term fixed loans, Loans may have prepayment penalties. |
First Time
Buyer | Low to NO down payment or money out of pocket | May be subject to income, credit, and property value limitations |
| Construction | Ability to build new home with as little as 10% down. Can be converted to fixed rate financing once construction is complete. | Requires good credit due to the nature of the loan. |
| VA/FHA/WEDA | Allows for a purchase or refinance with little to no money down, lower interest rates than many no money down programs. These programs will also offer financing to less than perfect credit. | These programs are only available to those who qualify. Closing fees for these programs may be higher due to the stringent requirements of the lenders. |
| Commercial | Allows for the investment purchase of nearly any commercial property. | Higher rates, Higher loan to value restrictions. |
