Loan Type

Loan Type	Characteristics	May be a good option if you:
Fixed rate mortgage (30,20,15,10 years)	Interest rate & payment remain the same for the life of the loan	Plan to live in the home for more then7 years; Want payment stability
10/1 Adjustable rate mortgage	Interest rate & monthly payment remain the same for 10 years. Starting the 11th year, interest rate is adjusted yearly for the remainder of the loan	Plan to move within 10 years, but want some stability if plans change & can tolerate 1 payment adjustment
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 adjusts to prevailing rates and remains there for the remainder of the loan	Plan to move within 7 years, but want some stability if plans change and can tolerate one payment adjustment.
7/1 adjustable rate mortgage	Rate & monthly payment remain the same for 7 years. Starting the 8th year, interest rate adjusts annually, therefore payment will change yearly	Plan to move within 7 years and want stability of payments in the first years of the loan.
7 year balloon mortgage	Interest Rate and payment remain the same for 7 years. At the end of 7 years the loan is due in full; Balloon payment.	Plan to move within 7 years and want stability of payments. If you stay more then 7 years you will have to refinance at prevailing interest rates
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 adjusts to prevailing rates and remains there for the remainder of the loan	Plan to move within 5 years, but want some stability if plans change and can tolerate one payment adjustment.
5/5 & 5/1 Adjustable rate mortgage. (Also available as a 3/3 & 3/1)	Interest rate & monthly payment remain the same for 5 years. On the 6th year, interest rate adjusts every 5 years to prevailing rates for the 5/5 loan and every year for the 5/1 loan.	Plan to move within 5 years, but want some stability if plans change and can tolerate some payment adjustments.
1 year adjustable rate mortgage	Interest rate is adjusted once per year, so payments will also change each year of the loan	Want to take advantage of the lowest possible interest rate.