Loan Programs

Years you plan to stay in the houseRecommended program
1-33/1 ARM, 1 year ARM or 6 month ARM
3-55/1 ARM
5-77/1 ARM
7-1010/1 ARM, 30 year fixed or 15 year fixed
10+30 year fixed or 15 year fixed


Loan Programs



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 over a shorter period of time
  • Many balloon mortgages offer the option to convert to a new loan after the initial term.

  • Risk of rates being higher at the end of the initial fixed period
  • Risk of foreclosure if you cannot make balloon payment or if you cannot refinance or if you cannot exercise the conversion option
  • First Time Buyer Programs
  • Lower down payment
  • Easier to qualify
  • Sometimes you may get lower rates
  • May be subject to income and property value limitations
  • Some programs which have government subsidies may have a recapture tax if you sell the house too early.

  • Stated Income Programs
  • Don't 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
  • Potential for reestablishing credit if you pay your mortgage on time.
  • When used for debt consolidation, you may be able to reduce your monthly debt payment

  • 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 1stmortgages
  • Harder to refinance your first mortgage
  • Mark Friedman
    Mark Friedman
    3123 Morning Way La Jolla CA 92037