Loan Programs

Which loan is right for me?

Years you plan to stay in the home

Recommended program

1-3 years

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

3-5 years

5/1 ARM

5-7 years

7/1 ARM

7-10 years

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

10+ years

30 year fixed or 15 year fixed

Loan Program

Advantages

Disadvantages

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

Loan Program

Advantages

Disadvantages

Adjustable Rate Mortgages (ARM)

10/1 ARM
7/1 ARM
5/1 ARM
3/1 ARM
1 year ARM
6 month ARM
1 month ARM

Lower initial monthly payment
Rates and payments may go down if rates improve
May qualify for higher loan amounts
30 year term, no balloon payment

More risk
Payments may change over time
Potential for higher payments if rates increase

Loan Program

Advantages

Disadvantages

Balloon Mortgages

7 year
5 year

Lower initial monthly payment
Lower payment for a predetermined 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, refinance, or exercise the conversion option
Balloon payment requires you to sell or refinance after the term, as opposed to a 7/1 or 5/1 program with a 30 year term

Loan Program

Advantages

Disadvantages

First Time Buyer Programs

Lower down payment
Easier to qualify
Lower rates may be available

May be subject to income and property value limitations
Some government subsidized programs may generate a recapture tax if you sell the house too soon
Education courses may be required to qualify for these loans

Loan Program

Advantages

Disadvantages

Stated Income Programs

Don't need to verify income
Faster approval
Good for borrowers who may not qualify with a full income documentation program

Higher rates
Higher down payment

Loan Program

Advantages

Disadvantages

Interest Only Programs

You have several payment options
Lower monthly payments
Qualify for a higher loan amount
Qualify at the interest only payment
Option to pay the full normal payment
Interest only payments for up to ten years

Higher rates
Principal loan balance will not decrease during the interest only payment period
Payment will be higher for the remaining term

Loan Program

Advantages

Disadvantages

No point, No fee Programs

No out-of-pocket loan costs at closing
Closing costs are paid from the lender rebate
Less money required to close
Refinance without increasing your loan amount

Higher rates
Higher payments
Some lenders may have a short payoff penalty which is usually charged to the loan broker, but may be passed on to you
Some require a prepayment penalty for the first one to five years

Loan Program

Advantages

Disadvantages

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

Loan Program

Advantages

Disadvantages

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
May be free of closing costs
A good source for an emergency fund, if set up in advance
Can be used for debt consolidation and lower payments
Rates are usually lower than consumer loan or credit card rates

Rates can change. The maximum interest rate can be relatively high
Payments can change
Harder to refinance your first mortgage

Loan Program

Advantages

Disadvantages

Home Equity Fixed Loan

Fixed payments
Interest may be tax deductible
Get cash out for any purpose

Higher interest rates compared to first mortgage
Harder to refinance your first mortgage
Interest is paid on the entire loan amount, compared to an equity line of credit

In addition to our standard loan programs, you may benefit by obtaining one of our many special programs:

Purchase your home with no down payment using Private Mortgage Insurance (PMI) or Lender-paid Mortgage Insurance (MI).

Piggyback loans: 80-10-10 or 80-15-5. Avoid PMI payments by using Lender-paid MI.

Debt consolidation programs.

Home Improvement loans.

You may qualify even if you've been turned down before!

 

	
		
			 
		
		
			
			BAY STATE REALTY 
			707 Main St., Millis, MA  02054
			(508) 376-8200 / 1-800-696-8200
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			Whether it’s your first home - or your next home – finding the right REALTOR® is the key to a smooth transaction. If you are looking to effectively market and sell your home for "Top Dollar", buy a New Construction home - we work with builders who want you to have representation - buy and existing home, Invest in real estate, purchase a second home, buy Commercial property, Land, or relocate to/from Massachusetts...Then, we would like earn the opportunity help you sell or buy your home.  Put our experience to work for you.  Search MLS for Massachusetts homes in the following towns:  Bellingham, Blackstone, Dover, Franklin, Grafton, Holliston, Hopedale, Hopkinton, Medfield, Medway, Mendon, Milford, Millis, Uxbridge, and more!