Basic Mortgage Options
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Mortgage Type: 30-Year Fixed Rate
Key Features: Interest rate remains the same for the life of the loan.
Benefits: Provides protection against rising interest payments. Predictable payments make budgeting for the future easy.
Client Profile: Especially attractive in a low interest rate environment and ideal if you plan to stay in your new home for at least 7 years.


Mortgage Type: 15-Year Fixed Rate
Key Features: Same as 30-year, but with slightly lower interest rates.
Benefits: Principal is paid off sooner, saving substantial money in interest payments.
Client Profile: Investment-minded homebuyers who can or wish to make higher mortgage payments can build equity faster.


Mortgage Type: Adjustable Rate (1-Year ARM)
Key Features: Interest rate (and monthly payments) can rise or fall as a result of annual rate adjustment, which occurs throughout the term of the loan in response to a changing economy.
Benefits: Initial interest rate and monthly payment are lower than that of a fixed rate mortgage.
Client Profile: May be a good choice in a higher interest rate environment if you need a a lower rate to qualify for financing or if you want to save some money in the first year.


Mortgage Type: Intermediate ARM
Key Features: Offers a fixed interest rate for a designated period (3, 5, 7 or 10 years) then adjusts annually. Often referred to as 3/1, 5/1, 7/1, and 10/1 ARMs.    
Benefits: Initial interest rate and monthly payment are lower than that of a fixed rate, so payments are more manageable during the introductory period. Rate is usually higher than the 1-year ARM, but payments are dependable for a longer period.
Client Profile: Can be a practical financial-planning tool for forward-thinking homebuyers who intend to move or refinance in 3, 5, 7 or 10 years.


Mortgage Type: Convertible ARM
Key Features: Offers an option to convert your loan to a fixed rate mortgage after a certain period of time (for example, anytime after the first through the fifth year).
Benefits: Advantage of a lower initial interest rate with an opportunity to change to a fixed rate when you can better afford it.
Client Profile: Good choice for homebuyers who need a lower qualifying rate today, but who may want to switch to a fixed rate in the future without refinancing.


Mortgage Type: Balloon Loan
Key Features: Offers fixed payments for a a period of time (usually 5 to 7 years), followed by one balloon payment of the remaining loan balance.
Benefits: Interest rate is lower than that of a fixed rate loan.
Client Profile: Popular choice of homebuyers who are certain they will move or refinance in 5 to 7 years.


Mortgage Type: Renovation Loan
Key Features: Finances the purchase of a home and provides the additional funds to improve or renovate it.
Benefits: Amount of money that can be borrowed is based on the future value of the home after improvement.
Client Profile: Perfect for the homebuyer looking to purchase a "fixerupper" or a house that requires remodeling to accommodate family needs.