Real Estate
Loans: Read this to get the right mortgage
Ok, you’ve decided to buy that home you’ve always wanted. You’re pre-approved and you have to decide
which mortgage type is right for you.
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The type of life you lead (or you wish to lead) should have a bearing on your decisions. Here are some scenarios
Scenarios that you may wish to consider.
Let’s say that you wish to stay in your home less than five years and you’re looking for a low monthly
payment, you may wish to consider a) a long term Adjustable Rate Mortgage (five years or longer0 if your
income is fixed or expected to decline, or b) a short term Adjustable Rate Mortgage (3 years or fewer) if your income
is expected to increase.
A second scenario would be if you want the lowest monthly payments and you’ll be in your home for more than 5
years. You may wish to consider a) a long term 30 year mortgage if your income is expected to decline, or b) a
short term or long term ARM if your income is expected to keep increasing.
And finally, if you don’t have much money for a down payment, you may want to consider a FHA loan or a VA loan
If you are a veteran.
And remember, the shorter your mortgage term, and the higher your monthly payments, the more you’ll save in
interest payments.
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