MORTGAGE LOANS

Fixed and Adjustable Rates

There are numerous loan programs for borrowers to consider. The two most common programs are those of fixed and adjustable rates. For all individual scenarios, there exists a beneficial program that will complement it. In some instances, this amounts to a combination of both fixed and adjustable rates. The difference between a fixed rate and an adjustable rate is quite simple:

In the case of fixed rates, the level of interest remains constant. As for adjustable rates, the level of interest (surprise, surprise) is capable of adjusting every six months. The advantage in choosing a fixed rate is that the level of interest can never rise above its initial rate. The advantage in choosing an adjustable rate is that the level of interest for these programs is discounted, and can, in effect, save you a great deal of money.

"HELOC's"

Fixed and adjustable programs, although the most popular, are not the only one's to choose from. Choosing a home equity line of credit (HELOC) can be advantageous for those who are responsible borrowers, and can be more or less compared to a credit card. There is a "draw" period during which the credit on the loan is available to the borrower. During this "draw" period, the borrower has a great deal of flexibility and control over the amount of money he/she wishes to borrow. The borrower can choose to use the full balance of the credit line, or simply use funds as needed. As payments are made, the line of credit is restored and available for the borrower to use again. The reasons for utilizing a home equity line of credit range from debt consolidation, refinancing and home improvements, to education, investments, entertainment and vacations.

Balloon Program

Another mortgage program to consider is a balloon program. A balloon program are mortgage loans with monthly payments that will be liquidated over a stated time frame. Once at the end of the agreed upon time frame, the balloon payment will be due requiring a lump sum of the remaining balance of the loan. It is common to refinance a balloon program at the maturity.

"Credit Comeback / Credit Repair"

A "credit comeback," also referred to as a "credit repair" program is set up in such a way as to assist borrowers with previously late mortgage payments. The program is designed to offer borrowers the opportunity to lower their interest rate by .375% every year for the first 4 years of their loan when they make their previous 12 payments on time. The beauty of this program is that your interest rate cannot be raised, but can be lowered up to 1.5%.