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- Fixed Rate Loans—An excellent way to lock into a low interest rate for the life of your loan.
- Adjustable Rate Mortgages (ARMs)—The flexible loan, with lower initial rates and payments.
- Initial Fixed Rate Loan—Start with a rate generally lower than standard fixed rate loans.
| 30 Year Fixed Rate |
| Appropriate for borrowers who: |
Loan Parameters |
| • |
Plan to live in the property over 10 years |
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Like total payment stability | |
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Interest rate & monthly payment remain the same for 30 years | |
| 15 Year Fixed Rate |
| Appropriate for borrowers who: |
Loan Parameters |
| • |
Plan on staying in property over 10-15 years |
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Want to pay off property faster than 30 years |
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Lower interest rate than 30 year loan | |
| • |
Interest rate & monthly payment remain the same for 15 years | |
| 10/1 Year semi-fixed |
| Appropriate for borrowers who: |
Loan Parameters |
| • |
Plan to live in property approximately 10 to 12 years |
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Like initial payment stability; can accept interest rate change later | |
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Interest rate & monthly payment fixed for the first 10 years |
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Starting the 11th year, interest rate adjusted every year, therefore, payment is subject to change every year for remainder of loan | |
| 7/23 (2-Step) or '30/7 + 23' |
| Appropriate for borrowers who: |
Loan Parameters |
| • |
Plan to live in property approximately 7 to 8 years |
| • |
Can handle one payment adjustment | |
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Interest rate & monthly payment fixed for the first 7 years |
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Conversion option: On the 8th year, interest rate adjusted to reflect prevailing fixed interest rates. Resulting payment will remain the same for remainder of loan | |
| 7/1 Year semi-fixed rate |
| Appropriate for borrowers who: |
Loan Parameters |
| • |
Plan to live in property approximately 7 to 8 years |
| • |
Like initial payment stabilityand can handle change later | |
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Interest rate & monthly payment fixed for the first 7 years |
| • |
Starting the 8th year, interest rate adjusted every year, so payment is subject to change every year for remainder of the loan | |
| 5/25 (2-Step) or '30/5 + 25' |
| Appropriate for borrowers who: |
Loan Parameters |
| • |
Plan to live in property approximately 5 to 6 years |
| • |
Can handle one payment adjustment | |
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Interest rate & monthly payment remain fixed for the first 5 years |
| • |
Conversion option: On the 6th year, interest rate adjusted to reflect prevailing fixed interest rates. Resulting payment will remain the same for remainder of loan | |
| 5/5 & 5/1 Year semi-fixed rate |
| Appropriate for borrowers who: |
Loan Parameters |
| • |
Plan to live in property approximately 5 to 6 years |
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Like initial payment stability, can accept later changes | |
| • |
Interest rate & monthly payment remain fixed for the first 5 years |
| • |
Starting the 6th year, interest rate adjusted every 5 years(for 5/5 ARM) and every year (for 5/1 ARM) | |
| 3/3 & 3/1 Year semi-fixed |
| Appropriate for borrowers who: |
Loan Parameters |
| • |
Plan to live in property 3 years or less |
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Like initial payment stability, can accept later changes | |
| • |
Interest rate & monthly payment remain fixed for the first 3 years |
| • |
Starting 4th year, interest rate adjusted every 3 years (for 3/3 ARM) and every year (for 3/1 ARM) | |
| Adjustable rate loans |
| Appropriate for borrowers who: |
Loan Parameters |
| • |
Want to take advantage of lowest rate possible |
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Are willing to accept yearly payment changes OR |
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Cannot qualify at higher rate programs | |
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Interest rate adjusted every year, so monthly payment is subject to change every year for entire 30 year loan term |
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Potential higher payments (at maximum interest rate) | |
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