With so many mortgage loans currently on the market, trying to choose the one that best matches your needs can be difficult. Since buying a home is not only a huge financial investment but also an investment that will require your time and effort when it comes to upkeep. Therefore, you want to start the buying process off right by choosing the best possible loan.
For starters, you want to determine how many years you expect to stay in the house. Now granted, sometimes situations arise in which plans change but at least put a plan together so you have a foundation on which to build. For instance, if you plan to live in your new home one to three years, we would recommend a one or three year Adjustable Rate Mortgage. If the plan is to live in the home four to six years, then consider a five or seven year Adjustable Rate Mortgage or a seven year Balloon. Then, if you plan to stay in the home seven years or more, a 10-year Adjustable Rate Mortgage, or 15, 20, or 30-year Fixed Rate Mortgage is a great option.
If you find yourself in a position where you need a lower monthly mortgage payment or if you are trying to build equity in the home quickly, you would choose a home loan differently. In this case, to reduce the monthly payment, a one, three, five, or seven year Adjustable Rate Mortgage, or a 30-year Fixed Rate Mortgage is a great solution. However, if you want to build equity, we suggest a 15 or 20-year Fixed Rate Mortgage.
You should also think about how much risk you want to take. Some people are very comfortable with stretching things when it comes to the mortgage loan while other people need more security. If you do not like being in vulnerable positions due to the change in interest rates, then a 15 or 30-year Fixed Rate Mortgage or a 10-year Adjustable Rate Mortgage would work best. The other side is for people comfortable with market fluctuations, in which a one, three, five, or seven year Adjustable Rate Mortgage or a five or seven year Balloon is recommended.