AdvantageDisAdvantageLoan

The following table shows Advantages v/s Disadvantages of various loan programs

Loan Program        Advantages                                                  Disadvantages

Fixed Rate                  • Monthly payments are predictable          • Pay more in interest
                                   • Less risk                                                        • Higher interest rate
                                   • Rate does not change                                 • Not taking advantage of lower
                                                                                                                    interest rates

Adjustable Rate        • Initial monthly payments are lower
                                   • Easier to qualify for higher loan                • More risk
                                      amounts                                                          • Un-predictable future housing
                                                                                                                    costs
                                                                                                                • Potential higher payments
                                                                                                                   (Life Cap)
Stated Income          • Income is not verified                                  • Higher rates
                                                                                                                • To be qualified, a low LTV is
                                                                                                                    needed
Combination loans
(Ex: 80/10/10)            • Avoid PMI
                                  • Tax advantages                                             • Possibly higher monthly
                                                                                                                   payments
                                                                                                                • Two monthly payments are
                                                                                                                   needed (instead of one)

HELOC                        • Flexible access to funds : only draw        • Higher interest rate than
                                     what you need , only pay interest on           a first mortgage.
                                     what you borrow
                                  • Tax advantages

Home Equity Loan    •   Predictable fixed payments                     •   Higher interest rate than
                                   • Tax advantages                                               a first mortgage
                                                                                                                • Cannot withdraw any
                                                                                                                   additional fund

We hope the above information can give you some ideas about choosing your financial
plan/need.

Please call us anytime. Our response is as soon as possible, usually within 10 minutes.

Best Regards,

Caroline Tran & The PURITY Group
DRE# 01334109
Vice President, CFO – The PURITY Real Estate Investment and Finance, Inc.
(408) 595 – 6416, (408) 904 - 7030
CarolineTran@thePURITYgroup.com