Which loan is right for me?
| Loan Program | Advantages | Disadvantages |
|---|---|---|
| Fixed Rate Mortgages30 year20 year15 year10 year | Monthly payments are fixed over the life of the loanInterest rate does not changeProtected if rates go upCan refinance if rates go down | Higher interest rates (then ARM’s)Higher mortgage payments (then ARM’s)Rate does not drop if interest rates improve |
| Loan Program | Advantages | Disadvantages |
| Adjustable Rate Mortgages (ARM)10/1 ARM7/1 ARM5/1 ARM3/1 ARM | Lower initial monthly paymentRates and payments may go down if rates improveMay qualify for higher loan amounts30 year term, no balloon payment | More riskPayments may change over timePotential for higher payments if rates increase |
| Loan Program | Advantages | Disadvantages |
| Balloon Mortgages7 year5 year | Lower initial monthly paymentLower payment for a predetermined period of timeMany balloon mortgages offer the option to convert to a new loan after the initial term | Risk of rates being higher at the end of the initial fixed periodRisk of foreclosure if you cannot make balloon payment, refinance, or exercise the conversion optionBalloon 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 |
| Loan Program | Advantages | Disadvantages |
| First Time Buyer Programs | Lower down paymentEasier to qualifyLower rates may be available | May be subject to income and property value limitationsSome government subsidized programs may generate a recapture tax if you sell the house too soonEducation courses may be required to qualify for these loans |
| Loan Program | Advantages | Disadvantages |
| Stated Income Programs | Don’t need to verify incomeFaster approvalGood for borrowers who may not qualify with a full income documentation program | Higher ratesHigher cost’ |
| Loan Program | Advantages | Disadvantages |
| No Doc Loans | You do not have to verify income or assetsQualify when income cannot be verifiedQualify when employment cannot be verifiedBased on only FICO score and appraisal | Higher ratesHigher closing cost’sless programs to choose from |
| Loan Program | Advantages | Disadvantages |
| Interest Only | Qualify for more houseMuch lower paymentsCan pay towards the interest monthly if you choose | Higher ratesHigher closing cost’sYou will not pay any interest for the first 5-10 years |
| Loan Program | Advantages | Disadvantages |
| Imperfect Credit Programs | Potential for reestablishing credit if you pay your mortgage on timeWhen used for debt consolidation, you may be able to reduce your monthly debt paymentGet into the House you want now, instead of later. | Higher ratesTerms may not be as favorableHigher Closing Cost’sHarder to get long-term fixed loansLoans may have prepayment penalties |
| Loan Program | Advantages | Disadvantages |
| Home Equity Line of Credit | You only borrow what you needPay interest only on what you borrowFlexible access to fundsInterest may be tax deductibleMay be free of closing costsA good source for an emergency fund, if set up in advanceCan be used for debt consolidation and lower paymentsRates are usually lower than consumer loan or credit card rates | Rates can change. The maximum interest rate can be relatively highPayments can changeHarder to refinance your first mortgage |
| Loan Program | Advantages | Disadvantages |
| Home Equity Fixed Loan | Fixed paymentsInterest may be tax deductibleGet cash out for any purpose | Higher interest rates compared to first mortgageHarder to refinance your first mortgageInterest is paid on the entire loan amount, compared to an equity line of credit |
In addition to our standard loan programs, you may benefit by obtaining one of our many special programs:
- Purchase your home with no down payment.
- Piggyback loans: 80-10-10 or 80-15-5. Avoid PMI payments.
- New Construction Loans.
- Debt consolidation programs.
- Home Improvement loans also known as “re-hab loans”
- You may qualify even if you’ve been turned down before with our innovative and cutting edge programs!
Merrimack Mortgage Co. Inc. (c) 2008 | Privacy policy
660 Forest Avenue Portland, ME 04103 Phone: (207) 842-6854 Ext. 227 Fax Number: (207) 842-6858