Richard Gambord

Broker/owner

NMLS# 1660201

831-291-9700
Richard Gambord Broker/owner

Which Loan is Right For You?

In the past, every home owner got the same loan: a 30 year fixed mortgage. Today there are many different loan programs and choosing the right one could save you hundreds of dollars on your monthly payments.

happy couple buying a house

 

How Long Do You Plan On Living In The House? We Recommend:
Not Very Long (1-3 Years) 3/1 ARM, 1 year ARM or 6 month ARM
A few years (3-5 Years) 5/1 ARM
At least 5 years (5-7 years) 7/1 ARM
Around 10 years ( 7-10 years) 10/1 ARM, 30 yr fixed or 15 yr fixed
A long time (10 plus years) 30 year fixed or 15 year fixed

 

Loan Programs Advantages Disadvantages
30 year Fixed
15 year Fixed
  • Monthly payments won't change
  • Fixed interest rate
  • Protected if rates go up
  • Can refinance if rates go down
  • Higher interest rate
  • Higher mortgage payments
  • Rate does not drop if interest rates improve
Adjustable Rate Mortgages (ARMS)
  • Lower initial monthly payment
  • 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
Balloon Mortgages
  • 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, cannot refinance, or if you cannot exercise the conversion option
First Time Buyer Programs
  • Lower down payment
  • Easier to qualify for
  • 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.
No point, No fee Programs
  • No closing costs
  • Less money required to close
  • Higher rates
  • Higher payments
Home Equity Line of Credit
  • 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
  • Fixed payments
  • Interest may be tax deductible
  • Higher interest rates than on 1st mortgages
  • Harder to refinance your first mortgage

 

In addition to these standard loan programs, we offer a large number of specialized loans and affordable financial services to fit your needs. Please call us or complete our contact form for more information.