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Scenario - Client purchases a home for $200,000 we represent them as a buyers agent. We also broker a mortgage loan. Client had several programs from which to choose, but we narrowed it to the options below. The criteria given was they had $40k from proceeds of a home sale for down payment and a middle credit score of 720

None of the programs below require the traditional 1% Origination fee
We 'could' have added .5% to the interest rate of any of these programs to pay closing costs & fee's

The Options:

• 30 year note w/ 20% down @ 5.625% - $921 payment

• 15 year note w/ 20% down @ 6.000% - $1265 payment

• 7 year ARM w/ 20% down @ 4.325% - $794 payment

• New Program - 30 year @ 5.25% w/ 107% They borrowed 100% of homes purchase price ($200k) PLUS borrowed additional 7% ($14k*) towards extra expenses (closing costs, pre-paid insurance & taxes, fee's etc.)* this would allow them to move w/ no money out of pocket ** $1515 payments

Please review the comparison and analysis tool and note that all of these programs are compared over only 'Five' years (60 months) and factors variables like inflation, tax bracket, property appreciation, potential gains if funds had been invested total interest total principal total payment over five years.

Since they only planned to live in the home for five years, and wanted to use the $40K profit from previous home sales to pay for a dream vacation; the rest for graduate school for a child just graduating from college. They went with the 107% since they could use the cash and were in a tax bracket that allowed them to take advantage of the tax deductible interest. Over five years that cost them only more than traditional programs

Other popular programs include - Interest only, 103%, ARM's or other much lower 'Fixed interest' w/ points paid @ closing, you name it we can find it! See other programs click here

See More Real Estate & Mortgage Scenarios or a collection of Buying & Selling Checklists

* It will only allow you to borrow as much as you need, you cannot borrow cash it must be used for a cost or fee expense, so it may only be a 105.3%.

** 'Usually' any time you pay down less than 20% of the homes sales price you will be required to pay PMI private mortgage insurance (.275 of loan amount) until you reach the equivalent of 80% loan to value or at least 80% equity in your home. This is a unique program that does not require PMI!