There are many different loan products available today and it is often difficult to pick the one best suited to your financial goals. By answering the following questions, you’ll get a feel for what’s best in your financial situation.
How long do you intend to occupy the home?
| Length of stay in property |
Loan programs to consider |
| 1-3 years |
1- or 3-year adjustable rate mortgage (ARM) |
| 4-6 years |
5- or 7-year ARM; 5- or 7-year balloon |
| 7 years or more |
10-year ARM; 15-,20-, or 30-year fixed rate mortgage |
Would you prefer a lower payment or more rapid accumulation of equity?
| Financial goal |
Loan programs to consider |
| Equity buildup |
15- or 20-year fixed |
| Minimize payment |
1-, 3-, 5-, or 7-year ARM; 30-year fixed |
What do you feel interest rates will do in the future?
| Overall I believe interest rates will |
Loan programs to consider |
| Rise |
30-, 20-, or 15-year fixed; 7- or 10-year ARM; 7-year balloon |
| Fall |
1-year ARM |
| Stay about the same |
1-, 3-, 5-, or 7-year ARM |
How well do you tolerate risk?
| Risk toleration |
Loan programs to consider |
| Uncomfortable with vulnerability to interest rate fluctuations |
15- or 30-year fixed 10-year ARM |
| Comfortable with market changes |
1-, 3-, 5-, or 7-year ARM; 5- or 7-year balloon |
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