MN Online MLS
Search MLS
Mortgage Center
Mortgage Calculators
Get Pre-Approved
Free Home Value Analysis
Contact Us
Home
 
 
Types of  Mortgages Types of Home Loans
   

Number of years you plan to live in your home.

Recommended mortgage program

1-3

3/1 ARM, 1 year ARM or 6 month ARM

3-5

5/1 ARM, or 5/25 reset, 5/6 interest only

5-7

7/1 ARM, or 7/23 reset

7-10

10/1 ARM, 30 year fixed or 15 year fixed

10+

30 year fixed or 15 year fixed

Types Of Mortgages

PROS

CONS

Fixed Rate Mortgages

30 year fixed

15 year fixed

  • 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 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



Balloon Mortgages

7 year

5 year

  • Lower initial monthly payment
  • Lower payment for a shorter period of time
  • You may be able to convert to a new loan after the initial term.
  • Rates could be higher at the end of the initial fixed period
  • If you cannot make balloon payment or if you cannot refinance or if you cannot exercise the conversion option, you could lose your home.
 


First Time Buyer Programs

  • No down payment
  • Lower monthly payment
  • Up to 6% seller paid closing costs.
  • Helps you get into your first home and out of renting.
  • May have slightly higher interest rate with no down payment.
  • Many zero down programs have a fixed rate for only the first 2-3 years.



Stated Income Programs

  • Donít need to verify income
  • Faster approval
  • Higher rates
  • Higher down payment



No point, No fee Programs

  • No closing costs
  • Less money required to close
  • Higher rates
  • Higher payments



Imperfect Credit Programs

  • A way to reestablish credit if you pay your mortgage on time.
  • You may be able to reduce your monthly debt payment when paying off high interest credit cards with lower interest mortgage debt
  • Higher rates
  • Terms may not be as favorable
  • Harder to get long term fixed loans
  • Loans may have prepayment penalties



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



Home Equity Fixed Loan

  • Fixed payments
  • Interest may be tax deductible
  • Higher interest rates than on 1st mortgages
  • Harder to refinance your first mortgage




In addition to these loan programs, we also have a large number of other programs designed to meet your specific needs.  Call now to speak with a representative about these programs or any other needs you may have. Contact us.

Search the Minneapolis mls or mls listings