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Choosing the Right Loan With so many loan choices, how do you pick the right one? This section highlights the typical loans offered by banks, so that you can compare and decide which one fits best into your financial future.

Traditional Adjustable Rate Mortgages
Traditional ARMs offer you all the features of a fixed-rate loan combined with the value of an adjustable rate mortgage. Start with an initial low fixed rate for 1, 3, or 5 years. The rate will adjust annually. Periodic rate caps determine the maximum allowable increase or decrease when the rate changes, and a lifetime cap determines the maximum allowable increase in rate over the life of the loan.

  • Gives you set payments for a specific period of time
  • Low qualifying rates
  • Affordable home financing
Consider a Traditional ARM If:
  • You want the stability of a low fixed rate for a set period of time.
  • You prefer to keep extra cash on-hand for investing or other needs.
  • You are looking for a fully-amortizing product.
  • You intend to stay in the home for 5 years or less.
  • 15 and 30 year terms
  • 1, 3, and 5 year initial fixed rate period before adjusting.

Fixed Rate Mortgages
If you like to plan for the long-term and do not like to take risks, you might want to consider a fixed-rate loan. "Fixed" means that your interest rate and monthly loan payments remain the same for the life of your loan. Fixed rate mortgages are often offered 15- and 30-year fixed-rate terms, but there are many other term length variations.Your interest rate and monthly payment amount are established when the rate is locked on the loan. You might pay a little more for the security of a fixed-rate mortgage, but for many people, the resulting peace of mind is worth it.

  • Guaranteed rate for the term of the loan once you lock
  • Protection from rising interest rates
  • Fixed monthly payment amount
Consider a Fixed-Rate Mortgage If:
  • Your income is consistent and reliable.
  • You are willing to pay more for the security of fixed monthly payments.
  • You plan on keeping the same mortgage for seven years or more.
  • You are looking to get into a home with the lowest down payment possible.
  • 15 and 30 year terms: fixed interest rate and monthly loan payments over the life of your loan.
  • 30 year fixed rate loan due in 7 years: interest rate is fixed for 7 years with a rate typically lower than a 30-year fixed rate loan. The loan balance is due at the end of the 7th year as a balloon payment. At that time you have the option to refinance the remaining 23 years or pay the balance.

Home Equity Lines of Credit
Home equity lines of credit allow an individual to use the equity in their home to do with what they want. The options include, but are not limited to the following.
  • Remodel your home
  • Take a vacation
  • Consolidate bills
  • Buy a car, boat or RV
  • Finance tuition or other expense
Benefits include:
  • Quick credit approval - in many cases!
  • Possible tax advantages - interest on a home equity line of credit may be tax deductible (consult a tax advisor)

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