30 year fixed
15 year fixed
 

• Fixed monthly investment.
• Fixed interest rate.
• Fixed rate mortgages are protected against interest and monthly payment increases.

• Higher interest rate compared to ARM introductory rates.
• Higher rate compared to two and three year, fixed/adjustable rate loans
• Longer term mortgages should be obtained if you plan not to move or refinance in the foreseeable future.

• Lower initial monthly investment.
• May qualify for higher loan amounts.
• Lower payment over a shorter period of time
• Rates and payments may go down if rates improve.

• Risk of higher monthly payments if rates go up.
• Payments may change over time.

• Lower initial monthly payment
• Lower payment over a shorter period of time
• Many 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 period
• Risk of foreclosure if you cannot make balloon payment or if you cannot refinance or if you cannot exercise the conversion option

• Lower down payment
• Easier to qualify
• Sometimes you may get lower rate

• May be subject to income and property value limitations
• Some programs which have government subsidies may have a recapture tax if you sell the house too early.

• Don't need to verify income
• Faster approval

• Higher rates
• Higher down payment

• No closing costs
• Less money required to close

• Higher rates
• Higher payments

• Potential for re-establishing 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

• 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

• Fixed payments
• Interest may be tax deductible

• Higher interest rates than on 1^st mortgages
• Harder to refinance your first mortgage