Not too many years ago, you couldn't even ask this question. All loans were fixed rate, and carried a fixed monthly payment that lasted for a certain number of years. Today you have a wide range of loans to choose from. Federated Lending Corporation (FLC) has one of the most extensive product lines in the industry. With the help of an FLC loan officer, you can select just the right mortgage for your particular needs and circumstances.

PROGRAM	LOAN RANGE	Minimum LTV
		purchase	refinance	cash-out
30 Year Fixed	$100,000 to $417,000	95%	95%	90%

Program Strengths:	Long term rate security

Program Drawbacks:	Often the highest rate program. May be more rate security than the owner will ever need.

Recommendations:	A good program if the owner does not plan to move or refinance for more than 10 years. A good choice if rates are historically very low. Points make sense to purchase if borrower plans to be in the property for at least 4 _ years.

PROGRAM	LOAN RANGE	Minimum LTV
		purchase	refinance	cash-out
30 Year Jumbo	$417,001 to $1,000,000	95%	90%	75%

Program Strengths:	Long term rate Security

Program Drawbacks:	Rates are higher than even the 30 year fixed conforming. Very expensive mortgage compared to Jumbo ARMs.

Recommendations:	A good program for the security conscious and those with fears of rising rates, but not usually a good way to save money.

PROGRAM	LOAN RANGE	Minimum LTV
		purchase	refinance	cash-out
15 Year Fixed	$100,000 to $417,000	95%	95%	90%

Program Strengths:	Rate security for 15 years. Rates often _% better than the 30 year. More of your payment goes to principal and less to interest. Build equity at twice the pace of a 30 year loan without making double the payment.

Program Drawbacks:	Borrower will qualify for smaller loan amount than for 30 year amortized programs.

Recommendations:	If building equity is your goal and you would rather save money on interest than buy a more expensive home, the 15 year is the program for you.

PROGRAM	LOAN RANGE	Minimum LTV
		purchase	refinance	cash-out
15 Year Jumbo	$417,001 to $1,000,000	90%	90%	75%

Program Strengths:	Rate security for 15 years. Rates often _% better than the 30 year. More of your payment goes to principal and less to interest. Build equity at twice the pace of a 30 year loan without making double the payment.

Program Drawbacks:	Borrower will qualify for smaller loan amount than for 30 year amortized programs.

Recommendations:	If building equity is your goal and you would rather save money on interest than buy a more expensive home, the 15 year is the program for you.

PROGRAM	LOAN RANGE	Minimum LTV
		purchase	refinance	cash-out
1 Year Adjustable	$100,000 to $1,000,000	90%	90%	varies
30 year amortization Rate adjusts every year based on 1 year treasury +( 2.75% or 3.25%). Caps are 2% per year and 6% for the term of the loan.

Program Strengths:	Lowest rate for first year out of available programs.

Program Drawbacks:	Risky for long term considering rate can increase as much as 6

Recommendations:	Great program for those who are going to be in a home for three years or less, those who plan on making more money over the next few years and those looking to refinance within the next three years. Not a good program if you think rates are going to increase over the next few years.

PROGRAM	LOAN RANGE	Minimum LTV
		purchase	refinance	cash-out
3/1 Adjustable	$100,000 to $1,000,000	90%	90%	varies
30 year amortization Rate is fixed for three years then adjusts each year based on the 1 year treasury +2.75%. Caps are 2% per year and 6% for the term of the loan.

Program Strengths:	Lowest qualifying rate of all loans allows borrower to "qualify" for the largest loan. A good combination of fixed rate security and low starting rate.

Program Drawbacks:	Three years fixed may not be enough to give one "peace of mind".

Recommendations:	Great program for Jumbo loans and those who plan on being in a home for 3 to 5 years. Good program for anyone who believes that rates will be lower at some point in the next five years.

PROGRAM	LOAN RANGE	Minimum LTV
		purchase	refinance	cash-out
5/1 Adjustable	$100,000 to $1,000,000	90%	90%	varies
30 Year Amortization Rate is fixed for five years then adjusts each year based on the 1 year treasury +2.75%. Caps are 2% per year and 6% for the term of the loan.

Program Strengths	The five year lock in period offers as much security as most borrowers use (The national average life span of a loan is 4.7 years) and at a noticeable savings over the 30 year fixed. The 5/1 usually has a lower par rate( a rate with 0 points) than the 5/25 Balloon and a better rate after the 5th year of the loan.

Program Drawbacks:	Five years fixed may not be enough to give one "peace of mind".

Recommendations:	Great program for borrowers (Jumbo especially) who want added security of a longer fixed rate term but still want to save money over a 30 year.

PROGRAM	LOAN RANGE	Minimum LTV
		purchase	refinance	cash-out
5/25 Balloon	$100,000 to $417,000	80%	80%	varies
30 Year Amortization Rate is fixed for five year then adjusts one time based on the 60 day FNMA bond rate plus .625%.

Program Strengths:	Low rate with 5 year fixed rate security. Great program for borrower planning on paying off loan or relocating in five years or less. Program can have extremely low rates with modest point buy-down.

Program Drawbacks:	Five years fixed may not be enough to give one "peace of mind".

Recommendations:	Great program for borrowers (Jumbo especially) who want added security of a longer fixed rate term but still want to save money over a 30 year.

PROGRAM	LOAN RANGE	Minimum LTV
		purchase	refinance	cash-out
7/1 Adjustable	$100,000 to 1,000,000	90%	90%	varies
30 Year Amortization Rate is fixed for seven years then adjusts each year based on the 1 Year Treasury+ 2.75%.

Program Strengths:	At times has a lower rate than the 30 Year fixed.

Program Drawbacks	The spread between the 30 year fixed and 7/1ARM is usually not that dramatic.

Recommendations:	If you plan on being in your loan for seven years or less, want a low rate, and are insistent on an ARM.

PROGRAM	LOAN RANGE	Minimum LTV
		purchase	refinance	cash-out
7/23 Balloon	$100,000 to $417,000	90%	90%	varies
30 Year Amortization Rate is fixed for seven years then adjusts one time based on the 60 day FNMA bond rate plus .625%.

Program Strengths:	Fixed rate security for seven years is usually more than most borrowers need, at a rate better than the 30 year fixed.

Program Drawbacks:	The adjustment after the seventh year usually yields a high rate.

Recommendations:	A good mix of security and low rate for those planning on being in a loan for seven years or less.

If you feel more comfortable with a mortgage that has the same monthly principal and interest payment for the life of your loan, you should consider a fixed-rate mortgage. Federated Lending Corporation offers terms of 7 through 30-years. We publish rates for the standard 15 and 30 year mortgages. Ask a loan officer for a personalized quote for any term.

If an initially lower interest rate and lower monthly payments appeal to you, think about our adjustable-rate mortgages (ARMs). As interest rates rise and fall, the interest rate on these loans also rises and falls. Federated Lending Corporation offers a 6-month and 1-year adjustable in varying loan amounts. We also have combination mortgages that combine the low introductory payments of an adjustable-rate mortgage with the stability of fixed payments in the first few years. You may want to consider a 3/1, 5/1, or 7/1 combo loan. After a fixed payment in the first 3, 5 or 7 years, your loan converts to a 1-year adjustable, with a rate change every year thereafter. To protect you against sharp rate increases, FLC ARMs feature yearly and lifetime interest rate caps.

Combination mortgages are loan programs that combine the low payments of an adjustable rate mortgage with the stability of a fixed-rate mortgage during the initial years of the loan. Statistics show that most homeowners have their mortgage loans an average of seven years before moving or refinancing. This means that a "combination" mortgage may provide a cost savings to many home buyers who might not even be considering these alternative financing vehicles. Combination mortgages fall primarily into two categories: The 3/1, 5/1 and 7/1 mortgages begin with a fixed rate during the initial payment period. At the end of the 3-, 5- or 7-year period, the loan automatically becomes a 1-year adjustable. The initial rates on these combination loans are lower than the rates on a fixed-rate mortgage but higher than a 1-year adjustable. Their advantage over the 1-year adjustable is the length of time (3, 5 or 7 years) that they provide payment stability. The 5/25 and 7/23 loans are excellent options for buyers who know they will move after an initial five- or seven-year period, or who don't mind refinancing if they later change their minds about selling. Although the initial term is short, the payments are amortized over 30 years, so with a start rate lower than the regular 30-year fixed rate, buyers can save money. At the end of the initial period, the unpaid principal balance of the balloon note is due as a lump sum on the balloon maturity date. If the borrowers have decided not to move, they may choose to exercise their conditional refinance option which would convert the loan to a 25-year or 23-year fixed-rate mortgage.

FHA (Federal Housing Administration) mortgages offer low down payments and income, asset, and credit qualifying criteria that may be more attractive to buyers whose mortgage needs fall within the FHA regional loan limit guidelines. An FHA mortgage is assumable under certain conditions, so you may be able to offer it to future buyers - making it an attractive selling feature.

FHA is a fixed-rate or adjustable-rate program with a down payment of approximately three percent of the purchase price. Because qualifying ratios are more lenient, you are able to be approved for a larger loan amount with less income. All of your closing costs may come from a gift or up to 6% from the seller. There are loan amount limitations that vary by region across the nation.

VA (U.S. Department of Veterans Affairs) mortgages often require no down payment and are available to eligible military personnel and members of the National Guard, veterans, and widows or widowers of veterans.

To qualify, you must obtain a Certificate of Eligibility from your local VA office. If you are not sure whether or not you are eligible, contact your local VA office -- or call a FLC loan officer to assist you.

With a zero down payment on VA loans, which are fixed-rate only, and a higher qualifying debt ratio (41%), this loan makes home ownership a reality for men and women who serve and have served our country. All of the closing costs may be paid by a third party, including the seller.

Qualified borrowers can receive up to $650,000 to finance their residential dwelling. For loans over $650,000, we offer super jumbo loans providing financing up to $1,000,000. Federated Lending Corporation has designed a variety of jumbo financing options for mortgages greater than $227,150. Down payments start as low as 5%!

Some of the jumbo and super jumbo financing options we offer include: A fixed-rate jumbo mortgage for up to $300,000 which requires a down payment of only 5% for a single-family, primary home purchase. A variety of fixed-rate, adjustable-rate and combination jumbo loan programs for second homes, condos, and PUDs (planned unit developments). A no-income verification, primary-home purchase and a rate & term refinance programs for self-employed borrowers offer 70% financing up to $650,000. FLC's super jumbo mortgages provide financing up to $1,000,000! Both our fixed-rate and adjustable-rate loans offer 70% financing up to $750,000 or 60% financing up to $1,000,000 on single-family, detached primary homes (borrowers must have a minimum net worth of $1,000,000).

If you are purchasing a home in Pennsylvania, you will want to inquire about our simplified loan documentation process that provides loan approval quickly. You may obtain information about these mortgages and other services by calling 800-355-9220.

The balloon loan is typically amortized over a standard fixed rate mortgage period but has a shorter maturity. At maturity, the loan generally needs to be paid off, with some loans having a conditional option to refinance. These types of loans are for people who know that they will only be in a home for a set number of years (5, 7 and 15 years are the most common) and are usually amortized over a 30 year period. These loans carry interest rates that are less than the 30 year rate.

If a home buyer is working with a general contractor (builder) to construct a home, the builder may require partial payments prior to the final completion of the home. This program allows a home buyer to build a home and permanently finance the home with one closing. This results in one application, one closing, assurance of permanent loan prior to construction, and a reduction of closing costs.

Some self-employed borrowers may benefit from No Income Verification mortgage loans. The processing is very simple, and the rates and terms are similar to conforming loans. These are usually loans for people with good to excellent credit who don't qualify under normal underwriting guidelines due to insufficient income.