Clarion Mortgage Capital

There are many loan programs to fit almost any need. Please call and ask which loan program best fits your situation.

Use the information below to choose the best program for your need.

Years you plan to stay in the house:	Recommended Program(s):
1 - 3	3/1 ARM, 1 year ARM or 6 month ARM, 5 year interest only
3 - 5	5/1 ARM, 5 year interest only, 40 year fixed
5 - 7	7/1 ARM, 10 year interest only, 40 year fixed
7 - 10	10/1 ARM, 40 or 30 or 15 year fixed
10+	40,30 or 15 year fixed

There are many loan products designed to meet the borrowers individual criteria. Most of these products fall into a few basic loan types.

15- 30 or 40-Year Fixed Rate: Payment and rate stay the same from start to finish plus tax & insurance
5 and 7 Year Balloons: Lower start rate. Some of the balloon programs may
be converted to an adjustable rate or a fixed rate after the 5 or 7
years, with very low fee and attractive rate
Adjustable Rate Mortgage (ARM): Lowest start rate Adjusts either every 6 months or
every 12 months depending on program and grade and is based on the
economy 6% ceiling for prime and 7% ceiling for sub-prime.
5/1 and 7/1 Fixed Rate: Rate is fixed for the first 5 or 7 years, then shifts to an adjustable rate mortgage (ARM).
2/28 and 3/27 ARM: An ARM program that is fixed for the first 2 or 3
years, then shifts into a 6 month adjustable rate mortgage. It is a
sub-prime program giving you a rate lower than the sub-prime 30-year
fixed, and if you have had credit problems, it allows a window of time
for credit rebuilding and seasoning. You will then want to refinance
this loan.

Here are a few things to keep in mind when selecting a loan program.

15- 30 or 40-Year Fixed Rate
Advantages:	Disadvantages:
Maximum interest deduction for taxes, sometimes easier to qualify, stable predictable payments, high loan to value, lower down payment, possible secondary financing if needed.	Pay more interest over the life of the loan, higher starting interest rate, Lower debt ratio (Larger Income to qualify) Higher monthly payment.

5 and 7 Year Balloons
Advantages:	Disadvantages:
Lower starting interest rates help qualify for higher loan amounts. If you plan to sell within 2-3 years. If you expect your income to increase	Periodic payment and rate increases, builds equity Slower payment increases may affect budget.

Adjustable Rate Mortgage (ARM)
Advantages:	Disadvantages:
Lower starting rate than 30 year fixed great for refinancing from a higher rate use when you plan a move in 5-7 years Some are convertible to 30-yr fixed or a treasury ARM, low fees, good rates.	Periodic payment and rate increases, builds equity Slower payment increases may affect budget.

5/1 and 7/1 Fixed Rate
Advantages:	Disadvantages:
No Rate Change in First Years Lower Starting Fixed Rates If You Plan to Sell Within 3 - 7 Years Allows Budget Planning Can Give You Time to Repair Credit	Rate Increases after Fixed Term Possible 6% Lifetime Rate Increase Builds Equity Slower Loses Advantage After First Fixed Period Fixed rates change to adjustable rate