LOAN CHOICES

MORTGAGE LOAN CHOICES
Which Loan/Mortgage Program fits you best? It is easy to get confused and make the wrong choice when you are choosing a loan program. Buying a new home is an important event and Stonehill Mortgage can help you make the right loan choice.
30 Year Fixed Rate Mortgage
This loan program is very popular. The monthly payment is calculated based on the initial interest rate, and never changes for the 30 year life of your loan. The 30 Year Fixed Rate Mortgage is one of the most conservative loan programs out there. The risk that changing market conditions will effect your monthly payment is zero. This loan program is probably right for you if you don’t plan to move or refinance for at least 10 years and you expect interest rates to increase over this period, or you just feel uncomfortable making an interest-rate bet at this time.

20 Year Fixed Rate Mortgage
Like the 30 Year Fixed Rate Mortgage, the 20 year program guarantees that your payment will not change over the life of your loan. Since you are committing to pay off your loan over a shorter period, however, your monthly payments would in turn be higher than for the previous program.

15 Year Fixed Rate Mortgage
This is the most aggressive of the Fixed Rate Mortgage options that are offeres. This loan is paid off in only 15 years, thus resulting in a higher monthly payment. This mortgage program is for individuals who can afford the higher monthly payment and are willing to pay more over a shorter period of time with the goal of owning the home without debt as soon as possible.

Interest Only Loan 
The borrower pays only the interest that accrues on the loan balance each month.  Because each payment goes toward interest, the outstanding balance of the loan does not decline with each payment. An interest only loan does not mean you will never pay principal on a home loan.  These mortgage programs have what’s known as an interest-only payment option attached to the note.  In all cases the note will state how long your interest-only payments will last.

3 Year Adjustable Rate Mortgage
This program is a 30 year loan in which the rate (and therefore your monthly payment) changes every 3 years. Like the 1 Year Adjustable Rate Mortgage, your new rate is calculated based on a predetermined formula.

5 Year Adjustable Rate Mortgage
This program is a 30 year loan in which the rate (and therefore your monthly payment) changes every 5 years.

3/1 Adjustable Rate Mortgage
This 30 year mortgage program offers a fixed interest rate for the first three years and then turns into a 1 Year Adjustable Rate Mortgage for the remaining 27 years of the loan. This loan has become quite popular in the last two years and should be considered by all those seeking to minimize monthly payments while accepting a certain amount of risk.

5/1 Adjustable Rate Mortgage
This 30 year loan program offers a fixed interest rate for the first five years and then turns into a 1 Year Adjustable Rate Mortgage for the remaining 25 years of the loan. This loan has a longer initial fixed period than the 3/1 Adjustable.