As you decide what type of mortgage is right for you, the chart below is a great tool in helping you the right loan product based on the amount of time you expect to remain in your home and your qualification.

Years In Home Recommended Product
1-5 3/1 ARM, 5/1 ARM, 30 Year Fixed, 20 Year Fixed
5-9 5/1 & 7/1 & 10/1 ARM, 30 Year Fixed, 20 Year Fixed
10-12 10/1 ARM, 30 Year Fixed, , 20 Year Fixed, 15 Year Fixed
12+ 30 Year Fixed, 20 Year Fixed, 15 Year Fixed


Mortgage Products Pro's Con's
Fixed Rate
30 Year Fixed
20 Year Fixed
15 Year Fixed
10 Year Fixed
  • Principal and interest (P & I) does not change.
  • Fixed-rate mortgages fully amortize over a defined period of time and are paid in-full at the end of the loan term.
  • No Penalty to Refinance if Rates Drop
  • Protection against Increase in Interest Rates
  • Higher rate of interest versus ARM
  • Higher monthly payments
Adjustable Rate Mortgages
3/1 ARM
5/1 ARM
7/1 ARM
10/1 ARM
  • Lower initial monthly payments
  • More flexibility in size of loan amount
  • After initial start period, rates may go down based on market
  • Interest only options available
  • Interest rate may be lower than fixed rate mortgages.
  • May allow for easier loan qualification due to lower rate.
  • Payments may go up over time
  • Potential for refinance sooner than planned

Interest Only
3/1 ARM
5/1 ARM
7/1 ARM
10/1 ARM

  • Lower initial monthly payments
  • More flexibility in size of loan amount
  • After initial start period, rates may go   down based on market
  • Unless properly managed you may not pay down the principal balance of your home loan
FHA 203(b)
30 Year Fixed
15 Year Fixed
  • Low down payment
  • More lenient qualifications (lower credit score requirements)
  • May have higher closing costs/fees
Second Home
  • Purchase a place to vacation
  • Potentially write off mortgage interest
 
Investment Properties
Up to ten (10)
  • Take advantage of Low Interest Rates to purchase a property for investment income