Drawing on over forty-five years of industry experience, our Mortgage Expert Insights review the pros and cons for over 30 mortgage programs . Selecting the right program puts you in the best position to qualify for a mortgage that you can afford. We review the key positives and negatives for a wide range of loan programs including no and low down payment options, fixer upper programs and green mortgage programs. Our Mortgage Expert Insights also outlines the advantages and disadvantages of using different types of lenders including big banks, mortgage brokers, credit unions and mortgage banks. Continue reading to determine the program and lender that put you in the best position to realize your mortgage goals.
Adjustable Rate Mortgage Pros and ConsUnderstand the pros and cons of an adjustable rate mortgage (ARM) including advantages such as a lower initial interest rate and monthly payment, the ability to qualify for a larger loan and the possibility your rate goes down in the future. ARM considerations include potential payment shock as well as less certainty and peace of mind.
Bank of America Affordable Loan Solution Pros and ConsReview the pros and cons of the Bank of America Affordable Loan Solution Program with pros such as low down payment and no PMI. Program disadvantages include a higher mortgage rate, more conservative qualification requirements, loan limits, borrower income limits and property restrictions.
Chase DreaMaker Mortgage Program Pros and ConsUnderstand the pros and cons of the Chase DreaMaker Mortgage Program with pros such as a competitive interest rate, potentially reduced private mortgage insurance (PMI), no restrictions on property location and a low down payment requirement. Program cons include a higher interest rate than government-backed programs, borrower income limits and loan limits.
Citibank HomeRun Mortgage Pros and ConsReview the pros and cons of the Citibank HomeRun Mortgage Program including pros such as market mortgage rates, no PMI, no restrictions on property location. Program considerations include a higher required financial contribution from the applicant, income limits and loan limits.
FHA 203(k) Loan Program Pros and ConsUnderstand FHA 203(k) Loan Progam pros and cons including positives such as financing the purchase or refinance of a home plus major home improvements with one loan, low down payment, attractive mortgage rates and getting a loan based on the after renovation property value. Program negatives include FHA mortgage insurance as well as extra costs and documentation.
FHA Cash Out Refinance Pros and ConsReview the pros and cons of the FHA Cash Out Refinance Program including positives such as the ability to take more cash out of your home, higher maximum loan-to-value (LTV) ratio, lower FHA interest rates and no income limit. Program considerations include that applicants must be current on their mortgage and loan limits.
FHA Energy Efficient Loan Pros and ConsUnderstand the pros and cons of an FHA Energy Efficient Mortgage (EEM) including financing the cost of energy efficiency home upgrades with one mortgage, improved property value and lower utility bills. Program considerations include a limit on how much you can spend on upgrades, higher closing costs and a longer closing schedule.
FHA Mortgage Pros and ConsLearn the pros and cons of an FHA mortgage including positives such as a low down payment requirement, lower interest rates, flexible qualification requirements and no income limit. Negatives of an FHA loan include loan limits and upfront and ongoing mortgage insurance premium fees, which are extra costs for borrowers.
FHA Streamline Refinance Pros and ConsUnderstand FHA Streamline Refinance pros and cons including positives such as not requiring borrowers to verify their job, income or credit score; no appraisal report requirement; no maximum LTV ratio; and, attractive loan terms. Program cons include stricter loan terms, applicants must be current on their mortgage and FHA MIP.
Fixed Rate Mortgage Pros and ConsReview the pros and cons of a fixed rate mortgage with positives such as a set interest rate and monthly payment, flexible loan term options and greater peace of mind. Negatives of a fixed rate mortgage include a higher initial interest rate and monthly payment compared to other programs and the inability to reduce your rate without refinancing.
HARP 2.0 Pros and ConsUnderstand the pros and cons of HARP 2.0 with positives such as no loan-to-value (LTV) ratio limit, no appraisal report and flexible qualification guidelines including no credit report or maximum debt-to-income ratio. HARP 2.0 cons include that the program has expired and is no longer available.
HELOC Pros and ConsLearn the pros and cons of a HELOC including positives such as the ability to draw down and repay the line multiple times, a lower initial interest rate and enhanced financial flexibility. HELOC considerations include a potential change in interest rate, payment shock and extra fees.
Home Equity Loan Pros and ConsReview the pros and cons of a home equity loan including pros such as lower closing costs, a fixed interest rate, lower interest expense, few limits on how you spend the proceeds and increased borrowing capacity. Home equity loan cons include less financial flexibility and a set loan amount.
Home Possible Mortgage Pros and ConsUnderstand the pros and cons of a Home Possible Mortgage including positives such as a low down payment, potentially a lower mortgage rate, no upfront mortgage insurance and the ability to use a non-occupant co-borrower to qualify for the loan. Home Possible Program negatives include stricter qualification requirements, income limits and loan limits.
HomeOne Mortgage Program Pros and ConsReview the pros and cons of the HomeOne Mortgage Program. Positives include a low down payment, the ability to buy a home with no personal financial contribution, no geographic restrictions and no income limit. Negatives include loan limits, property restrictions, private mortgage insurance (PMI) and not allowing non-traditional credit profiles.
HomeReady Mortgage Pros and ConsUnderstand the pros and cons of a HomeReady Mortgage including positives such as a low down payment, the ability use alternate income sources to qualify, flexible eligibility guidelines and allowing the use of non-traditional credit profiles. HomeReady considerations include a higher interest rate, loan limits and potential borrower income limits.
HomeStyle Energy Mortgage Pros and ConsReview the pros and cons of a HomeStyle Energy Mortgage including pros such as financing the cost of buying a home and making energy efficiency improvements with one loan, increased home value and lower energy bills. Considerations include extra closing costs and a limit on proceeds that can be used for improvements.
HomeStyle Renovation Mortgage Pros and ConsUnderstand the pros and cons of a HomeStyle Renovation Mortgage including positives such as financing the purchase or refinance of a home plus major renovations with one mortgage and getting a mortgage based on the after renovation property value. Cons include a higher interest rate, closing costs and loan and renovation budget limits.
Interest Only Mortgage Pros and ConsUnderstand the pros and cons of an interest only mortgage with pros such as a lower initial monthly payment, the ability to afford a larger loan and the flexibility to pay down principal on your own schedule. Considerations include potential payment spike, higher risk and possibly stricter qualification requirements.
NACA Mortgage Program Pros and ConsReview the pros and cons of the NACA Mortgage Program with positives such as no down payment or closing costs, a low interest rate and flexible qualification guidelines including no credit score required. NACA Program cons include a rigorous application process, volunteer participation requirement and loan limits.
PACE Loan Pros and ConsUnderstand the Pros and cons of a PACE loan including pros such as financing 100% of energy efficiency improvements, the loan being attached to the home not the borrower and potential tax credits. Program considerations include most mortgage lenders do not permit PACE loans, limited availability and an increase in your property tax bill.
Pros and Cons of Using a Big Bank for a MortgageReview the pros and cons of using a big bank for a mortgage including positives such as attractive loan terms, potential borrower discounts, proprietary loan programs and working with a direct lender. Negatives of using a big bank include tougher qualification requirements, being subjected to cross selling and limited program offering.
Pros and Cons of Using a Credit Union for a MortgageUnderstand the pros and cons of using a credit union for a mortgage including pros such as competitive mortgage terms, better customer service, special mortgage programs and flexible qualification guidelines. The cons of using a credit union include a membership eligibility requirement and more narrow loan program offering.
Pros and Cons of Using a Mortgage BankReview the pros and cons of using a mortgage bank including positives such as an exclusive focus on mortgages, working with a direct lender and potentially attractive loan terms. Cons include a limited loan program offering for some lenders, stricter qualification requirements and they may sell your loan.
Pros and Cons of Using a Mortgage BrokerUnderstand the pros and cons of using a mortgage broker including pros such as shopping multiple lenders on your behalf, access to a wide range of mortgage programs and personalized customer service. Cons include mortgage brokers are not direct lenders and they may have less financial resources.
USDA Home Loan Pros and ConsReview USDA Home Loan pros and cons including benefits such as no down payment, paying a low mortgage rate, no loan limits and lower monthly mortgage insurance fees. USDA Home Loan negatives include property location eligibility requirements, borrower income limits and more conservative qualification guidelines.
USDA Streamline Refinance Program Pros and ConsUnderstand the pros and cons of a USDA Streamline Refinance including positives such as not requiring borrowers to verify their job, income or credit score, no maximum LTV ratio, no borrower income limit and low mortgage rates. Cons include loan restrictions, you must be current on your loan and USDA mortgage insurance.
VA Energy Efficient Mortgage Pros and ConsReview the pros and cons of a VA Energy Efficient Mortgage (EEM) including positives such as financing the cost of energy efficiency home improvements with one VA loan, low mortgage rates and lower utility costs. VA EEM Program negatives include restrictions on how much you can spend on the energy efficiency project as well as extra fees.
VA Mortgage Pros and ConsUnderstand VA Mortgage Program pros and cons including benefits such as buying a home with no down payment, lower mortgage rates, no monthly mortgage insurance and no income limit. VA Program negatives include stricter qualification requirements and the upfront VA funding fee.
VA Streamline Refinance (IRRRL) Pros and ConsReview the pros and cons of a VA Streamline Refinance (IRRRL) including pros such as no credit report or appraisal, no new certificate of eligibility required, attractive interest rates and no ongoing mortgage insurance. IRRL Program cons include loan restrictions and the upfront VA funding fee.
Wells Fargo yourFirst Mortgage Program Pros and ConsUnderstand the pros and cons of the Wells Fargo yourFirst Mortgage Program with positives such as a low down payment, no income limit, no property location restrictions and an interest rate discount if you complete a home buyer counseling class. Program considerations include conservative qualification requirements and property type restrictions.