Mortgage Rates - Finding the Right One for You

1yr Adjustable Rate Mortgages

• Interest rate adjusted every year, so monthly payment is subject to change every year for entire 30 year term
• Appropriate for people who want to take advantage of the lowest rate possible, are willing to accept yearly payment changes or those who cannot qualify at higher rate programs

5/1yr Adjustable Rate Mortgages

• Interest rate and monthly payment remain the same for 5 years.
• Starting the 6^th year, interest rate is adjusted every year
• Appropriate for people who plan to live in the property for more than 5 years, like initial payment stability and can accept later changes
• Appropriate for people who plan to move within 5 years and want a loan to remain in force in case plans change
• This type of mortgage can have a fixed interest rate and monthly payment for the first 5, 7 or 10 years and follow the same pattern as listed above

5 or 7yr Balloon Mortgage

• Interest rate and monthly payment remain the same for 5 or 7 years
• At the end of the 5^th or 7^th year, the loan is due in full.  Borrower must refinance into a new loan at prevailing interest rates
• Appropriate for people who plan to live in the property for more than 5 or 7 years, are willing to refinance at prevailing market rates
• Appropriate for people who plan to move within 5 or 7 years and want a loan to remain in force in case of plan changes