With so many loan programs available a borrower may just get overwhelmed and consider a loan program that sounds familiar to them. However, what was possibly a great loan for a ‘friend' may not be the best loan for you. There are always different variables in choosing a loan program that plays a role in the decision making process, especially since each loan program has it's own advantages and disadvantages. The information listed below is to help give you a better idea of all your options. As a general guideline, the number of years you plan to stay in the house should play a major role in the decision of your loan program of choice. The following is a general guideline to follow:

1-3 years: 3/1 ARM, 1 year ARM or 6 month ARM 3-5 years: 5/1 ARM 5-7 years: 7/1 ARM 7-10 years: 10/1 ARM; 30 Year Fixed or 15 Year Fixed 10+ years: 30 Year Fixed or 15 Year Fixed

The following is a sample of the Loan Programs which are available. These are general guidelines to help you better understand your options. ----------------------------------------------------------------------------------------------- Loan Programs: Fixed Rate Products Hybrid & Adjustable Rate Products Bi-weekly Loans “No Documentation” Loans “No Ratio” Programs Stated Income Programs First Time Buyer Combination Loans No Point, No Fee Programs Imperfect Credit Programs Interest Only Loans Prepayment Penalty Products FHA Loans VA Loans 40 Year Term Balloon Products Negative Amortization Loans 12 MAT Loans Home Equity Fixed Loan Second Home Loans Investment Property Loans Construction Loans (One Time Close) Construction Loans (Two Time Close) Reverse Mortgage

Fixed Rate Products: 3/1 ARM, 1 year ARM or 6 month ARM Advantages: - Monthly payments are fixed over the life of the loan - Interest rate does not change - Protected if rates go up - Can refinance if rates go down Disadvantages: - Higher interest rate - Higher mortgage payments - Rate does not drop if interest rates improve ----------------------------------------------------------------------------------------------- Hybrid & Adjustable: Rate Products 6 month, 1, 3, 5, 7, 10 Years Fixed; Monthly Adjustable COFI; Monthly Adjustable Libor Advantages: - 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 Disadvantages: - More risk - Payments may change over time - Potential for high payments if rates go up ----------------------------------------------------------------------------------------------- Bi-weekly Loans: Available on most loan products Advantages: - Reduces principal every 14 days instead of once per month - Pay off a home up to 10 years faster Disadvantages: - Equivalent of making 13 yearly payments instead of 12 ----------------------------------------------------------------------------------------------- “No Documentation”: Loans Up to 90% Loan to Value Advantages: - No documentation or verification of income or assets required - Faster approval - Flexibility Disadvantages: - Higher rates - Higher down payment ----------------------------------------------------------------------------------------------- “No Ratio” Programs: Up to 95% Loan to Value Advantages: - Income and employment are documented and verified, but not considered in qualifying Disadvantages: - Higher rates ----------------------------------------------------------------------------------------------- Stated Income: 30 Year Fixed; Up to 95% Loan to Value Advantages: - No documentation or verification of income required - Faster approval Disadvantages: - Higher rates ----------------------------------------------------------------------------------------------- First Time Buyer: 100% Loan, 97% FHA and Conventional Loans Advantages: - Lower down payment - Easier to qualify - Sometimes you may get lower rates Disadvantages: - May be subject to income and property value limitations - Some programs which have government subsidies may have a recapture tax if you sell the house to early ----------------------------------------------------------------------------------------------- Combination Loans: 75/15/10 90% CLTV; 80/10/10 90% CLTV; 80/15/5 95% CLTV; 80/20/0 100% CLTV Advantages: - No Mortgage Insurance - Tax advantages - Ability to waive tax and insurance impounds Disadvantages: - Higher interest rate on the second loan, however this is usually counterbalanced by the waiver of mortgage insurance ----------------------------------------------------------------------------------------------- No Point, No Fee: Available on most loan products Advantages: - No closing costs - Less money required to close Disadvantages: - Higher rates - Higher payments ----------------------------------------------------------------------------------------------- Imperfect Credit:   Advantages: - Potential for reestablishing credit if you pay your mortgage on time - When used for debt consolidation, you may be able to reduce your monthly debt payment Disadvantages: - Higher rates - Terms may not be as favorable - Harder to get long term fixed loans - Loans may have prepayment penalties ----------------------------------------------------------------------------------------------- Interest Only Loans: 5 Year Fixed; Up to 95% Loan to Value Advantages: - Payment flexibility and reduced minimum - Ability to use payment savings toward paying off higher yield loans or for investment purposes. Disadvantages: - Only for Jumbo Loans ($252,700.00 or above) - No principal reduction - Pre payment penalty - Risk of rates being higher at the end of the initial fixed period ----------------------------------------------------------------------------------------------- Prepayment Penalty: 1, 5, 7, 15, 30 Year Fixed Advantages: - Lower rates Disadvantages: - Significant penalty to pay the loan off early ----------------------------------------------------------------------------------------------- FHA Loans: 97% Loan Advantages: - Easier to qualify - Approval not based upon credit (FICO) scores Disadvantages: - Up from MIP Premium - Higher rates - Stricter standards set for property condition ----------------------------------------------------------------------------------------------- VA Loans: 100% Loans; Must be a US Armed Services Veteran to be eligible Advantages: - Easier to qualify - Approval not based upon credit (FICO) scores - No monthly mortgage insurance Disadvantages: - Up from MIP premium - Higher rates - Stricter standards set for property condition ----------------------------------------------------------------------------------------------- 40 Year Term: Loan payments are calculated on a 40-year term versus traditional 15 or 30. Advantages: - Lower monthly payment - Greater cash flow for investment properties Disadvantages: - Slower to build equity ----------------------------------------------------------------------------------------------- Balloon Products: 5 Year Balloon; 7 Year Balloon Advantages: - Lower initial monthly payment - Lower payment over a shorter period of time - Many balloon mortgages offer the option to convert to a new loan after the initial term Disadvantages: - Risk of rates being higher at the end of the initial fixed period - Lower payment over a shorter period of time - Risk of foreclosure if you cannot make balloon payment or if you cannot refinance or if you cannot exercise the conversion option ----------------------------------------------------------------------------------------------- Negative Amortization: Up to 95% Loan To Value; 1 Year Fixed; Monthly ARM; COFI or LIBOR Monthly ARM”s Advantages: - Ability to pay full payment, interest only, or negative amortization - Payment flexibility and reduced minimum monthly requirements - Ability to use payment saving towards paying off higher yield loans or for investment purposes - Slow moving COFI Index - Ability to state income Disadvantages: - Possible negative equity - Pre-payment penalty - Risk of rates being higher at the end of the initial fixed period ----------------------------------------------------------------------------------------------- 12 MAT Loans: Up to 95% Loan to Value; Monthly ARM (30 yr); LIBOR Monthly ARM Advantages: - Ability to pay full payment, interest only, or negative amortization - Payment flexibility and reduced minimum monthly requirements - Ability to use payment saving towards paying off higher yield loans or for investment purposes - Better rate than traditional Negative Amortization loans - Ability to state income Disadvantages: - Possible negative equity - Pre-payment penalty - Risk of rates being higher at the end of the initial fixed period - Rate based upon faster adjusting LIBOR index ----------------------------------------------------------------------------------------------- Home Equity Fixed Loan: Up to 80% Loan To Value Advantages: - Fixed payements - Interest may be tax deductible Disadvantages: - Higher interest rates than on 1 st mortgages - Harder to refinance your first mortgage ----------------------------------------------------------------------------------------------- Second Home Loans: Up to 95% Loan to Value Advantages: - Ability to purchase a second or vacation home Disadvantages: - Slightly higher rates ----------------------------------------------------------------------------------------------- Investment Property: Loans Up to 95% Combined Loan to Value Advantages: - Availability to increase your financial portfolio with real estate - Ability to earn rental income Disadvantages: - Slightly higher rates - Stricter underwriting ----------------------------------------------------------------------------------------------- Construction Loans: One Time Close Advantages: - One closing - The lender initiates and regulates the draws - Ability to lock loan before construction is complete Disadvantages: - Reduced flexibility - Contact prices determines Loan To Value ----------------------------------------------------------------------------------------------- Construction Loans: Two Time Close Advantages: - Greater flexibility - Second loan is considered a refinance so the LTV is based upon the appraised value Disadvantages: - Slightly higher fees ----------------------------------------------------------------------------------------------- Reverse Mortgage:   Advantages: - Enables elderly to convert home equity into cash for living expenses, home improvements, home health care, etc. - Can be in the form of a lump sum, fixed monthly payments, or a line of credit - Applicants do not have the same income or credit qualifications - Generally, the borrower can not be forced to sell their home to repay the mortgage as long as they occupy the residence