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Selecting a mortgage program can be complicated and confusing. There are countless programs available today and their guidelines are changing constantly. Tonya, a Certified Mortgage Planning Specialist, and her team work overtime to keep current on what is available in today’s marketplace. This allows them to assist you in picking the best program to fit into your family’s total financial picture.

There are many factors that can influence which loan is best for your needs:

• How long do you plan to own the home?
• What is your financial outlook for the near-term and long-term?
• Do you have future financial obligations (such as college, retirement, elderly care) that might limit your future ability to meet debt obligations?
• How comfortable are you with a payment amount that changes over time?
• Will you consider a balloon payment?
• What is your liquid asset position? Are you willing to make a larger down payment?
• Are you self-employed?
• How is your credit history?
• Are you a first-time homebuyer?
• Will you have adequate funds available after debt payments for retirement funding and other needs?

Understanding exactly what you need today and in the future is the first step to selecting the exact program for your financial plan.

The two most common types of programs are:

Fixed-rate mortgages, where the monthly interest and principal payments are fixed for the life of the loan.

Adjustable-Rate mortgage (or ARMS), where the interest rate is subject to change at specified intervals. This rate is tied to a specific index (Treasury Bills, a specific bond, etc) that may go up or down depending on changes in the financial market. For example, a 5/1 ARM is fixed for the first five years and then adjusts every year after that for the life of the loan.

Within these two broad categories are literally hundreds of specialized loan programs to fit nearly every possible situation and need, such as:

Balloon Mortgages (A short-term mortgage in which small monthly payments are made until the completion of the term, at which time the balance is due as a single lump-sum payment) are ideal for borrowers who know they will not occupy the home for long periods of time. For example, you may know that you will be transferred to another location in three years, and will likely sell the home and pay off the loan anyway. Since balloon loans usually have shorter terms (usually five to seven years) than a typical fifteen or thirty-year loan, the interest rate is often more favorable than that on a fifteen or thirty-year loan. A balloon mortgage usually offers many of the features of a fixed-rate loan, such as a conversion option to a longer-term loan in the event that your plans change unexpectedly. A balloon mortgage may be a fairly attractive financing vehicle if you are comfortable with the lump-sum payment that will be due at the end of the term.

Construction Permanent (C/P loans are a combination of construction and permanent financing for borrowers who have an agreement with an authorized General Contractor/Builder to construct their custom personal residence or second home) allow you to build the home of your dreams with only one closing for your construction phase and your permanent financing on the finished home.

Option ARM (an initial introductory period of 1-Month or 3-Month, after which the interest rate may change) allows you, after the Initial Introductory period, to select each month, in addition to the required minimum payment, one of three additional payment options. This can afford you great flexibility each month.

Let Janet guide you through all the options and features of these loans to help you select the special program that best fits your needs and your future.