Advantages and Disadvantages of Mortgage Programs

Years you plan to stay in the house	Recommended program
1-3	3/1 ARM, 1 year ARM or 6 month ARM
3-5	5/1 ARM
5-7	7/1 ARM
7-10	10/1 ARM, 30 year fixed or 15 year fixed
10+	30 year fixed or 15 year fixed

 

Loan Programs	Advantages	Disadvantages
Fixed Rate Mortgages
40 year fixed 30 year fixed 20 year fixed 15 year fixed 10 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 than ARM program*  Higher mortgage payments Rate does not drop if interest rates improve
Adjustable Rate Mortgages
10/1 ARM – 10y. fixed period 7/1 ARM – 7y. fixed period 5/1 ARM – 5y. fixed period 3/1 ARM – 3y. fixed period 1 year ARM 6 month ARM 1 month ARM	Lower initial monthly payment than fixed rate programs*  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
Interest Only (I/O) Option Programs
30, 40 year fixed programs 3/1, 5/1, 7/1, 10/1 ARMs	Lower initial monthly payment during the I/O period  More flexibility Two payment options are available up to 15 years: fully amortized (principal and interest) or interest-only.	Payments will be  higher at the end of the initial I/O period Higher interest rate than the same program without I/O option
High Loan-to-Value (LTV) Programs
	Lower down payment LTV can be up to 97%	May be subject to income and property value limitations May be subject to PMI (private mortgage insurance) Higher rates Higher payments
Stated Income Programs
Not available on today’s market	Don’t need to verify income	Higher rates Higher payments  Higher down payment      Subject to Loan-to-Value limitations
No point, No fee Programs
	Hidden 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
1st position up to 75% LTV2nd position up to 80% CLTV	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
2nd position up to 80% CLTV	Fixed payments Interest may be tax deductible	Higher interest rates than on 1st mortgages Harder to refinance your first mortgage

House-Selling Tips

 1) Find the value of your home at current market. There is a free website www.zillow.com. You can check the home value on Realty Trac. You can order an appraisal of a house on US Search Property Reports for a small fee. Or you can ask the appraiser to make the verbal appraisal.

2) Find an experienced real estate agent. He also helps you determine the price of the house. As they say: “There is no homes that can be unsold, it is incorrect price, for which no one wants to buy.” If you want to make a short-sale, and if your bank allows it, it is best to find an agent who deals with short-sale and is in this experience.

 3) Prepare your home for sale. Make your house clean, organized, and attractive to potential buyers to submit themselves living in it.

А  few simple tips, how to sell the house faster:

-Old and neglected front door makes your house less attractive for potential buyers. Paint, refresh the main entrance. You can hang a new, more attractive fixtures.

-Fresh neutral paint creates a feeling of novelty home. Wash all interior doors or paint them. Dirty doors will not help you quickly sell the house. That doors do not discolor and look like new long-term, they can be protected by polycrylic. “A clear finish topcoat in a water-based formula that offers protection along with fast-drying times. Can be used over bare wood, oil- and water-based stains, paint and wallpaper.”

-Wash all windows and put the window blinds or curtains. If the windows are narrow , the rods with the curtains should be much wider than the window. This visually expand a window.

 -Remove all of your family photos. They make people feel like they’re invading your space.  And you need them to feel at home.

-Remove all toys, extra books, small items, large flowers, etc. This will create a feeling of bigger space. Leave just a vase of flowers and a couple of small sculptures on the coffee table and mantel.

-Make your space more warmer and inviting. Add some colored pillows, a picture (do not overdo main), lighting. Properly placed lighting creates a cozy home.

-Too much furniture, or vice versa, making the room is not appealing – too busy or too empty.

-Organize your closets. Piles of clothes make your closet visually smaller.

-Clear off countertops.  Messy coutertops and tables left no room for food preparation or eating.

-Get rid of moldy caulk in bathrooms. The entire room is sparkling-clean, bottles and jars are tucked away. A bathroom with everything in view made even a fairly clean bathroom look disorganized.

-Organize your basement. Even if the basement is unfinished, disorganized piles of junk are a huge turnoff to potential buyers.