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Request a Loan - About Our Loans
- Reasons to Finance
Less Than Perfect Credit
- Loan Process
Adjustable Rate Mortgage (ARM)
-6 month ARM
-12 month ARM
PROS
Six and twelve month ARMs can significantly lower
a mortgage payment for six or twelve months. That
can be enough time to catch up on other debt payments
and improve your credit rating.
CONS
Six and twelve month ARMs can become expensive
after the initial six or twelve month introductory
period. Chances are, you'll want to improve your
credit and obtain a better loan.
Hybrid Fixed Rate Mortgages
-2 year fixed
-3 year fixed
-5 year fixed
PROS
These hybrid fixed rate mortgages provide the security
of a fixed loan payment and relatively low, fixed interest
rate for the first 2, 3, or 5 years depending on the program.
For most people trying to improve their credit, two to three years
is plenty of time. After the fixed period, these loans convert to ARM
loans. Hybrid fixed rate mortgages have been the most popular
mortgages for quite some time as most people refinance again within five
(5) years as market conditions fluctuate.
CONS
Hybrid fixed rate mortgages convert to ARM loans at the end of the fixed
rate period. Rates on ARMs can increase. Chances are, you'll want to
improve your credit and obtain a different loan before the fixed period elapses.
Fixed Rate Mortgages
-15 year fixed
-30 year fixed
PROS
Fixed monthly payment and rate protect against
interest and monthly payment increases
CONS
Higher interest rate compared to ARM introductory
rates
Higher rate compared to two and three year, fixed
rate loans
Fifteen and thirty year loans should generally
be obtained if you do not to move or refinance in
the foreseeable future. If you're trying to improve
your credit in anticipation of refinancing for a
lower-rate loan, consider avoiding these loans.
Adjustable Rate Mortgages
-10/1 ARM
-7/1 ARM
-3/1 ARM
-1 year ARM
-6 month ARM
-2/28: 2 yr. fixed rate; 28 yr. ARM
-1 month ARM
PROS
Lower initial monthly payment
Lower payment over a shorter period of time
Rates and payments may go down if rates improve.
May qualify for higher loan amounts
CONS
Payments may change over time, but usually only marginally
Potential for payments to increase in the rare incident of a sharp rate spike
Balloon Mortgages
-15 year (30 yr. fixed, due in 15)
-7 year
-5 year
PROS
Lower initial monthly payment
Lower payment over a shorter period of time
Many balloon mortgages offer the option to convert
to a new fixed rate loan after the initial term
CONS
Must refinance at the end of or sometime before
the balloon note is due
No or Stated Income/Asset Programs
PROS
No tax returns or W-2s
No proof of assets or down payment
No verification of income
Fast approval
Limited documentation required
CONS
Slightly Higher rates
Higher down payment
Home Equity Line of Credit
PROS
You only borrow what you need
Pay interest only on what you borrow
Access to funds as needed
Interest may be tax deductible
Up to 125% loan-to-value
CONS
Rates can change
Payments can change
Home Equity Fixed Loan
PROS
Fixed payments
Interest may be tax deductible
CONS
Receive one lump sum
Cannot access equity as needed
Many lending institutions will not loan you money
if your credit is less than perfect. Other companies
may, but at astronomical interest rates. At Pico
Funding, we create home loans for conscientious
people in all credit grades. You'll find that our
loans are easier to qualify for, and our interest
rates are competitive.
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for a Loan
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