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There is no mortgage available to fit everyone's loan needs. Some things to consider when looking for your ideal mortgage :
1. How long do I plan to live in this home?
-- If you plan to move pretty soon you may want to consider an adjustable rate mortgage while rates are low. This can save you hundreds of dollars vs. a fixed rate loan.
2. How much do you have to put down?
-- For a lot of people, this will determine what kind of loan to get. If you don't have much down payment you may want to consider FHA loans or VA loans if you are eligible. Conventional loans typically require more down payment.
3. Are you a saver?
-- If you don't save money well or aren't confident about your future credit you probably should steer clear of any mortgages with a balloon payment such as an interest only loan.
Some general guidelines :
If you plan to live in the home for a long time - consider fixed rate mortgages.
If you plan to move within 3-5 years - consider an adjustable rate mortgage or interest only.
If the you are an investor and plan to rent the property out - consider fixed rate.
If you can, try to work around the mortgage insurance. This can be accomplished in a number of ways.
1. Obtain a 75% loan, 20% second loan, with 5% down.
2. Obtain a straight 80% loan with 20% down payment.
3. Get a seller to carry back a portion to help.
4. There are newer programs where you may obtain 80% first loan and a full 20% second loan. The rate is usually normal on the first and higher on the second.
Related Article:
What's a Mortgage >>
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