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Loan Programs
Finding out which loan is right for you is best decided by you and your mortgage agent. For a list of local agents go to our mortgages webpage. |
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Fixed Rate Mortgages |
30 year fixed & 15 year fixed |
Advantages |
Disadvantages |
- 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
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Adjustable Rate Mortgages (ARM) |
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Advantages |
Disadvantages |
- 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
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- More risk
- Payments may change over time
- Potential for higher payments if rates increase
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Balloon Mortgages |
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Advantages |
Disadvantages |
- 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
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- 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
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FHA Mortgages |
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Advantages |
Disadvantages |
- Your FICO score plays a very small role in determining approval
- You need only put down 3 percent
- Interest rates are very competitive compared to private loans
- Approval is easier to get since the FHA is insuring the loan.
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- The maximum amount that can be loaned to you is actually relatively low
- You must occupy the home to get the loan, to wit, no investment properties
- You have to pay a mortgage insurance premium
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VA Mortgages |
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Advantages |
Disadvantages |
- Often require little or no down payment
- The loan maximum may be up to 100 percent of the VA-established reasonable value of the property
- There is no monthly mortgage-insurance premium (private mortgage insurance, or PMI)
- There is a limit on the buyer's closing costs
- The buyer receives an appraisal that shows the property value
- No pre-payment penalty
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- There is a maximum VA loan amount
- One-time funding fee
- Interest rates may or may not be better
- The inspection and warranty requirements are cumbersome to the realtor and seller
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Black Hills Real Estate (BHhomes.INFO)
2401 West Main, Rapid City, SD 57702
605.863.0806 | 605.863.0806@message.alltel.com | Lee@BHhomes.INFO
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Kahler REALTORS an independently owned and operated member of Prudential Real Estate Affiliates, Inc.
Information deemed accurate but not guaranteed. |
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