Loan Program |
Advantages |
Disadvantages |
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| Fixed Rate Programs |
• Fixed Monthly Payments for loan duration |
• Higher Interest Rate |
| 30 Year |
• Fixed interest rate for life of loan |
• Higher payments |
| 20 Year |
• If rates go down, you can refinance |
• Rates don't adjust if market rates go down |
| 15 Year |
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Loan Program |
Advantages |
Disadvantages |
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| Adjustable Rate Mortgages (ARM) |
• Lower initial monthly payments |
• Higher risk |
| 10/1 ARM |
• Rates & payments may go down if rates do improve |
• Payments can change over time |
| 7/1 ARM |
• May qualify for higher initial mortgage amount |
• Higher payment risk if market conditions change |
| 5/1 ARM |
• No Balloon Payment |
• Higher payment risk if market conditions change |
| 3/1 ARM |
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| 1 Year ARM |
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Loan Program |
Advantages |
Disadvantages |
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| First Time Home Buyers |
• Lower Down Payment |
• Possible tax liabilities |
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• Easier approval criteria |
• Some states or municipalities require that you participate in a first time homebuyer course |
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• Low interest rates in some cases |
• Some states or municipalities may impose an early sell tax penalty. |
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Loan Program |
Advantages |
Disadvantages |
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| Balloon Mortgages |
• Initial lower payment is typically less |
• Higher rate risk at end of fixed portion of the loan |
| 7 Year |
• Payment is typically lower during a set time or term |
• Higher risk of foreclosure as note comes due in full. |
| 5 Year |
• Some balloon mortgages do carry a conversion option to convert loan to a fixed before the end of the term. |
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Loan Program |
Advantages |
Disadvantages |
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| Interest Only Loans |
• Several payment options are available |
• Rates are usually higher |
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• Lower monthly payments overrall |
• The principal balance of the loan does not get touched until the interest only portion of the loan is fulfilled. |
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• Allows you to qualify for a higher loan amount. (more house...) |
• Payment is higher once the interest only portion is over. (Principal payment is higher) |
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Loan Program |
Advantages |
Disadvantages |
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| Impaired Credit Loans |
• Helps to reestablish borrowers credit |
• Higher interest rates |
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• Can help reduce monthly payments on other debt, debt consolidation |
• Duration of loan and other terms may not be ideal |
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• Many impaired credit loans carry pre-payment penalties. |
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Loan Program |
Advantages |
Disadvantages |
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| HELOC or Home Equity Line |
• You can borrow only what you need, for specific projects or purchases |
• Payments can change, not all heloc's are fixed |
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• You only pay on what you borrow |
• There is typically an intitial draw minimum |
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• Easy access to equity, checks, debit cards, etc. |
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• Interest rates are typically lower than credit cards, revolving accounts, etc. |
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• Interest may be tax deductible |
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Loan Program |
Advantages |
Disadvantages |
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| Fixed Equity Lines |
• Payments stay fixed |
• Higher rates than a typical first mortgage |
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• Interest may be tax deductible |
• Interest is paid on the whole loan balance which can be more than the equity line. |
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| The above programs are just examples of some of the many loan programs that we offer at First Capital Mortgage, LLC. We are passionate about finding the right loan for you and your situation. Please call us today to learn more! 866-845-3917. |
