Advantages

Disadvantages

Fixed Rate Mortgages
30 Year Fixed
20 Year Fixed
15 Year Fixed

• Monthly payments are fixed for the life of the loan
• Protected against rate increases
• Can refinance if rates go down

• Higher interest rate
• Higher mortgage payments
• 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

• 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

Stated Income or No Doc Programs

• Don't need to verify income
• Faster approval

• Higher rates
• Higher down payment

Home Equity Line of Credit

• You only borrow what you need
• Pay interest only on what you borrow
• Flexible access to funds
• Interest may be tax deductible

• Rates can change. The maximum interest rate is normally high.
• Payments can change
• Harder to refinance your first mortgage