Which mortgage is right for you?

Program	Loan characteristics	Appropriate for borrowers who:
Fixed rate mortgage (30,10,15,10 years)	Interest rate & monthly payment remain the same for the entire term of the loan	plan to live in property more than 10 years like total payment stability
10/1 year adjustable rate mortgage	Interest rate & monthly payment remain the same for 10 years Starting the 11th year, interest rate adjusted every year, so payment is subject to change every year for remainder of loan	plan to live in property more than 10 years like initial payment stability, can accept later changes OR plan to move within 10 years want loan to remain in force in case plans change
7/23 (2-Step) or '30 due in 7' mortgage	Interest rate & monthly payment remain the same for 7 years Conversion option: On the 8th year, interest rate adjusted to reflect prevailing interest rates, resulting payment will remain the same for remainder of loan	plan to live in property more than 10 years can tolerate one payment adjustment OR plan to move within 7 years want to remain in force in case plans change
7/1 year adjustable rate mortgage	Interest rate & monthly payment remain the same for 7 years Starting the 8th year, interest rate adjusted every year, so payment is subject to change every year for remainder of the loan	plan to live in property more than 7 years like initial payment stability, can accept later changes OR plan to move within 7 years want loan to remain in force in case plans change
7 year ballon mortgage	Interest rate & monthly payment remain the same for 7 years At the end of 7 years, loan is due in full. Borrower must refinance into new loan at prevailing interest rates	plan to live in property more than 7 years are willing to refinance at prevailing market rates OR plan to move within 7 years like payment stability
5/25 (2-Step) or '30 due in 5' mortgage	Interest rate & monthly payment remain the same for 5 years Conversion option: On the 6th year, interest rate adjusted to reflect prevailing interest rates, resulting payment will remain the same for remainder of loan	plan to live in property more than 5 years can tolerate one payment adjustment OR plan to move within 5 years want loan to remain in force in case of plans change
5/5 & 5/1 year adjustable rate mortgages	Interest rate & monthly payment remain the same for 5 years Starting the 6th year, interest rate adjusted every 5 years (for 5/5 ARM) and every year (for 5/1 ARM)	plan to live in property more than 5 years like initial payment stability, can accept later changes OR plan to move within 5 years want loan to remain in force in case plans change
5 year balloon mortgage	Interest rate & monthly payment remain the same for 5 years At the end of 5 years, loan is due in full. Borrower must refinance into new loan at prevailing interest rates	plan to live in property more than 5 years are willing to refinance at prevailing market rates OR plan to move within 5 years like payment stability
3/3 & 3/1 year adjustable rate mortgages	Interest rate & monthly payment remain the same for 3 years Starting 4th year, interest rate adjusted every 3 years (for 3/3 ARM) and every year (for 3/1 ARM)	plan to live in property more than 3 years like initial payment stability, can accept later changes OR plan to move within 3 years want loan to remain in force in case plans change
1 year adjustable rate mortgages	Interest rate adjusted every year, so monthly payment is subject to change every year for entire 30 year loan term	want to take advantage of lowest rate possible are willing to accept yearly payment changes OR cannot qualify at higher rate programs