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6 Of The Most Popular Mortgage Options

1. 30-year conventional fixed rate loanBenefits include:
  • Monthly payments for principle and interest remain the same over the life of the loan (no surprises)
  • Lower monthly payments when amortized over a 30-year payment period (360 payments)
    2. 15-year conventional fixed rate loan (also available in 10 & 20-year payment schedules)Benefits include:
  • Monthly payments of principle and interest remain the same over the life of the loan (no surprises)
  • Substantial savings of interest over the life of the loan (example: $100,000 loan at 8% amortized over a 30-year period the total interest paid is $164,166.27. The same loan amount, same interest rate amortized over a 15-year period is $72,017.41. The money saved in interest is $92,148.86.
  • Payments are approximately 25-30% higher when amortized over a shorter period of time (15-year amortization vs.a 30-year amortization)
    3. No-Point / Zero Closing Cost LoansBenefits include:
  • Less cash needed at closing. The interest rate will usually be 1/2 to 3/4 of a percent higher when compared to loans that have points to pay at closing.
    4. 7-year fixed rate balloon with a 30-year amortizationBenefits include:
  • Slightly lower rate and/or less fees than the conventional 30-year fixed rate loan
  • Payment of principle and interest remains the same over the 7-year period of time *Remember, at the end of the 7 years, you will need to pay off the remaining balance with either a lump sum of cash or re-finance the remaining loan amount.
    5. Adjustable Rate Mortgages (ARM)There are many options with adjustable rate mortgages; the most popular tends to be the 1-yearadjustable rate mortgage with a 30-year amortization schedule.Benefits include:
  • Lower interest rate for the 1 st year
  • Easier to qualify for the loan amount
  • You can qualify for a larger loan amount
  • In a market when rates are going down, a year ARM offers the ability to adjust downward at the 1 year anniversary of your loan.
    6. Federal Housing Administration (FHA)There are many loan products available.
  • Easier to qualify for loan programs than conventional financing.
  • Less down payment needed

  • The above text is for informational purposes only & is not a substitute for legal, tax or other professional assistance.
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