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Loan Program Term Guide

At Fidelity Lending Northwest, one of our main priorities is to have as many loan options available for our clients; however, we also know that one of the most important aspects of the loan process is matching the right loan program for the individual.

If you have any questions that we may answer, please feel free to contact us.

 

 Years you plan to stay in the house
Recommended programs
1-3
6 month, 1 year, 3/1 ARM
3-5 
5/1 ARM
5-7
7/1 ARM
7-10
10/1 ARM, 30 & 15 year fixed
10+
30 year fixed or 15 year fixed

 

 

Fixed Rate Mortgages
Advantages
Disadvantages
  • Monthly payments are fixed over the life of the loan.
  • Can refinance if rates go down.
  • Protected if rates go up.
  • Interest rate does not change.
  • Rate does not drop if interest rates improve.
  • Higher mortgage payments.
  • Higher interest rate.

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Adjustable Rate Mortgages
Advantages
Disadvantages
  • 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.
  • Lower initial monthly payment.
  • More risk.
  • Payments may change over time.
  • Potential for high payments if rates go up.
  • Risk of rates being higher at the end of the initial fixed period.

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Balloon Mortgages
Advantages
Disadvantages
  • 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 foreclosure if you cannot make the balloon payment, refinance or exercise the conversion option.

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First Time Buyer Programs
Advantages
Disadvantages
  • Lower down payment.
  • Easier to qualify.
  • Sometimes you may get lower rates.
Some programs which have government subsidies may have a recapture tax if you sell
the house too early.

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Stated Income Programs
Advantages
Disadvantages
  • Do not need to verify income.
  • Faster approval.
  • Higher rates.
  • Higher down payment.

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No point, No fee Programs
Advantages
Disadvantages
  • No closing costs.
  • Less money required to close.
  • Higher rates.
  • Higher payments.

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Imperfect Credit Programs
Advantages
Disadvantages
  • 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.

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Home Equity Line of Credit
Advantages
Disadvantages
  • 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.

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Home Equity Fixed Loan
Advantages
Disadvantages
  • Fixed payments.
  • Interest may be tax deductible.
  • Higher interest rates than on 1st mortgages.
  • Harder to refinance your first mortgage

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4090 SW 177th Ave.
Aloha, OR. 97007
Phone: (503) 259-8655
Fax: (503) 259-8899
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