At River Rock Mortgage, we believe that the Right Mortgage Costs Less.  Below is a summary of the Loan Programs available to purchase or refinance your home.  These are meant to be used as a guideline to select the right mortgage for your particular needs.  To have a licensed River Rock Mortgage Loan Professional guide you through this process, please click here.

How Long do You Plan to
Live in Your Home?
  
Recommended Loan
Program
One Year to Three Years   3/1 ARM, 1 year ARM or 6 month ARM
Three Years to Five Years   5/1 ARM
Five Years to Seven Years   7/1 ARM
Seven Years to Ten Years   10/1 ARM, 30 year fixed or 15 year fixed
Ten Years and Longer   30 year fixed or 15 year fixed

Loan Programs
Advantages
Disadvantages
  
Fixed Rate Mortgages
Prequalify Here
30 Year Fixed - Monthly payments are fixed over the life of the loan - Higher interest rate
15 Year Fixed - Interest rate does not change
- Protected if rates go up
- Can refinance if rates go down 		- Higher mortgage payments
- Rate does not drop if interest rates improve
Adjustable Rate Mortgages
Prequalify Here
10/1 ARM - Lower initial monthly payment - More risk
7/1 ARM - Lower payment over a shorter period of time - Payments may change over time
3/1 ARM - Rates and payments may go down if rates improve - Potential for high payments if rates go up
1 Year ARM - May qualify for higher loan amounts
6 Month ARM
1 Month ARM
Balloon Mortgages
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7 Year - Lower initial monthly payment
- 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
5 Year - Lower payment over a shorter period of time - Risk of foreclosure if you cannot make balloon payment or if you cannot refinance or if you cannot exercise the conversion option
First Time Buyer Programs
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- Lower down payment
- Easier to qualify
- 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.
Stated Income Programs
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- Don't need to verify income
- Faster approval 		- Higher rates
- Higher down payment
No point, No fee Programs
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- No closing costs
- Less money required to close 		- Higher rates
- Higher payments
Imperfect Credit Programs
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- Potential for reestablishing 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
Home Equity Line of Credit
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- 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 Line of Credit
Prequalify Here
- Fixed payments
- Interest may be tax deductible 		- Higher interest rates than on 1st mortgages - Harder to refinance your first mortgage

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