Michael Behan

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The Right Mortgage for You <!--<caption></caption>-->

From the editors of

When it comes to mortgages, homebuyers have many options to choose from, and believe it or not, not everyone should go with a 30-year fixed-rate mortgage, even if it is at a great rate.

To help you figure out which mortgage is right for you, we've created profiles of six common mortgage shoppers, from someone who is temporarily cash-poor to someone in search of a "jumbo" mortgage of more than $417,000 ($625,000 in Alaska and Hawaii). Everybody's situation, of course, is different and yours might not be perfectly matched here. But this approach is a good way to learn about who uses the different types of loans available and where the best place is to get them.

The Homesteader
You've just found a home in a nice neighborhood and you plan to stay there until your young kids are through high school. Or maybe you're 65 and are buying your retirement home. In either case, you know you're not moving for at least a decade.

What you want: No doubt about it. In the current environment, you want a fixed-rate mortgage. Rates on a 30-year fixed-rate loan are low, and though a fixed-rate still costs more than an adjustable-rate mortgage, the difference between the 2 is not that great. The price of stability, in other words, is relatively affordable. If your monthly cash flow permits it, you might consider a 15-year loan. The monthly payment is higher, but you pay less interest over the life of the loan.

The Relocator
You're never going to spend more than a few years in this house. Maybe your spouse has a thing about moving. Maybe you know you'll eventually need space to work from home. Maybe you're planning on high-tailing it to Montana in a few years. In any case, you're certain this isn't where you'll grow old.

What you want: You're a candidate for an adjustable mortgage or maybe a "delayed adjustable." Also known as 3-1s, 5-1s and 7-1s, these loans are fixed for their first 3, 5 or 7 years, then convert to a 1-year adjustable. Another thing: You can buy a "conversion option." For a small fee and a slight premium on the rate, many lenders will allow you to convert your delayed adjustable to a fixed rate, as long as you do so before the loan starts adjusting.

The Trader-Upper
The house you love comes with a hefty price tag-one that will require a mortgage of more than $417,000 (or $625,000 if you live in Alaska or Hawaii). You know you can qualify for the loan, and you've got a sizable down payment.

What you want: A jumbo loan. In the past, lenders didn't like jumbos because if one went bad, the effect was like losing five smaller mortgages. That's why rates were typically one half to a full percentage point higher. But now, they are a competitive part of the market-and lenders no longer get away with charging so much for larger loans.

The Temporarily Cash-Poor
You've found a great house, but qualifying for a big enough loan is a problem-for the time being. Maybe you're in your second year at the district attorney's office with a handful of offers to double your income in private practice. Maybe you're just about to finish paying your son's Harvard tuition. In either case, you know your disposable income is about to jump-and substantially.

What you want: The answer to your problem could be to "buy down" your loan, or pay another point or 2 up front to earn a lower interest rate. Then you can qualify for a bigger loan.

Consider what's known as a two-to-one buydown. You reduce the first year's rate by 2 points and the second year's by 1 point. In year 3, the loan becomes fixed, and it stays at that rate for the life of the loan. That can help you buy a lot more house.

The High Earner/Poor Saver
You've got a good job and you've found a house you adore. But you've been buried under student loans-or you've been traveling the globe without a care-and haven't been able to save for a down payment.

What you want: 15 years ago you had practically zero chance of getting 100% financing. Lenders were so nervous about it, the option wasn't even on the menu. But that might not be the case today.

The money in 100% financing these days usually comes bundled as a so-called 80-20 loan, or "piggy-backed second." That is, there's a first mortgage for 80% of the total and a second mortgage for the remainder. The bad news is that both come with high interest rates. You can even put down 0% and take out a 100% loan-to-value mortgage. Also, as the recent meltdown in the subprime mortgage market has demonstrated, it may be best for homebuyers to stay away from these risky mortgage products and put some money-even if it's a small percentage of the house's value-down.

Areas of Expertise

Residental, Commercial, Purchase, Refinance, Home Equity Lines of Credit, Construction to Permanent, Builder Sub-Divisions, Fix & Flip Loans, FHA/VA, SBA Business Loans, Self Employed Loan Special, Less Than Perfect Credit, Bankruptcy, 100% Financing for Owner Occupied and Non-Owner Occupied Properties, Foreign Nationals, New Hampshire Housing Finance Agency, Reverse Mortgages and more.

Testimonials

NBC WPTV Channel 5

Dear Mike:

It was a pleasure meeting you on Saturday at Lewis Builders' Colby Pond Development. Your professionalism and your personal touch are a breath of fresh air. Please share my compliments of your style with your bosses. I was very impressed. From start to finish you did what you said you were going to do and delivered the rates, terms and service as defined. There are not many like you left in todays business world. I enjoyed working with you and my brother is looking forward to doing business with you.

Sincerely,

Wayne Cunningham

Mike Behan and VIP Mortgage Corproation,

Thank you so very much for your professionalism and of course the great job you did with the Bernier's. We look forward to working with you in the future.

Sincerely,

Patricia Grahame, Broker, Patricia Grahame Real Estate

Mike,

We wanted to that you for all your help with our mortgage! It's great to finally have a home of our own! Also, thank you for the "Welcome Sign," it fits in great!

Thanks, Jospeph & Heather Saulnier

Mike and Stephanie,

I am very leased with the quality of serice that you provided to me. My mortgage was closed upon last Tuesday and I am so pleased to say that everyone that I met along the way was not only very helpful but knowledgable and professional. This was a very easy transaction from beginning to end. Thanks so much!!

Barbara J. Williams

Thanks Michael, I sincerely appreciate your help in getting this mortgage done for me. The closing went smooth and it turned out that I was being too hard on my self with all the worrying about it.

Antonio Gomez

Dear Mike,

I wanted to say thank you for taking the time to speak to my sister Sally. You helped her to open her eyes to what she needs to do to get ahead. Thank you again I really do appreciate it.

Linda at Lewis Builders

Michael:

I just want to that yo u and your gang at VIP Mortgage for all your help! I can't wait to move into my new home! Don't forget, you promised to come celebrate with us!

Lori Pearlo

Michael and Staff,

Thank you again for your support! We raised over $26,000.00 for scholarships for M.J. Rush Foundation for Children.

Sincerely, Kathy and Eric Rush