Fixed-Rate. Want stability? A fixed rate loan gets you evenly divided monthly payments spread over 15 or 30 years. You will know exactly what your payments will be next month, or 117 months from now. Other loan types might offer somewhat better rates, but this is the one you’ll never have to think of again. Down payments, depending on the loan, can be as low as five, three, or even zero percent!

Adjustable-Rate. Want Flexibility? Want a real shot at saving money? Payments tend to be lower with adjustable-rate mortgage (ARM), because you share some of the lender’s risk should interest rates rise significantly in the future. But don’t worry too much. Annual and lifetime caps keep rates in check. Generally, ARMs are easier to qualify for, allow you to buy a little bit more of a home, and offer significant savings up front – which you could use to buy needed household items, or to “grow” into future payments after promotions or pay increases at work.

Popular Loan Programs

The “True 100” – This program allows the buyer to have 100 % financing capabilities with up to a 3% seller contribution for closing costs. This program is great for a first-time buyer whose debt to income ratios work well but may be lacking the upfront down payment and closing costs. The main guidelines are credit scores, rations, and a minimum of $500.00 borrower contribution.

The “97” – This program allows the buyer to put as little as 3% down for financing. The 3% may be gifted by a family member or paid for by the seller. (with a max of 3%) The guidelines for this program are based upon debt to income ratios.

The “95” – This program allows the buyer to put 5% down for financing, giving the buyer a better rate, less PMI, and essentially making the loan conventional. The 5% down must come from the buyer. The guidelines for this product are based upon debt to income ratios.

The “80/20” – This program allows the buyer to have 100% financing capability. The nice advantage to the 80/20 is that there is no PMI. It involves taking two mortgages out, one for 80% and one for 20%, thus making the loan payment lower by avoiding PMI. There may also be a seller contribution of up to 3%. However with this program there are a few more strict guidelines because it is considered to be a higher risk loan. Credit scores must be over 680. Furthermore for a seller contribution, the credit scores must be over 700. There are no exceptions for this program. Debt to income ratios are also a main factor with this program. There are similar programs with as little as 5 and 10% down to also avoid PMI ( 80/10/10 or 80/15/5).

The “No-Doc” – This program does not require the disclosure of income, employment, or assets. It’s a perfect program for clients moving to the area or who are currently unemployed but have the means to acquire a mortgage. There is a minimum of 5% down for this program and credit scores must be over 660. (The No-Doc is ineligible for first time buyers or borrowers who have not owned a home within the past three years)

The “Interest-Only” – This program allows the borrower to qualify for a larger home while enjoying all the benefits of a dramatically reduced mortgage payment. This is the ultimate cash management tool for the savvy investor. The payment is lowered because you are not paying on the principle, only the interest. The advantage to this is to free up cash for investments or other expenses allowing a larger monthly cash flow. The program also allows the borrower to pay as much or as little on the principle, whenever. The guidelines for this product are based upon debt to income ratios.