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How to choose the right mortgage loan

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 propertyLoan programs to consider
1-3 years1- or 3-year adjustable rate mortgage (ARM)
4-6 years5- or 7-year ARM; 5- or 7-year balloon
7 years or more10-year ARM; 15-,20-, or 30-year fixed rate mortgage

 

Would you prefer a lower payment or more rapid accumulation of equity?

Financial goalLoan programs to consider
Equity buildup15- or 20-year fixed
Minimize payment1-, 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 willLoan programs to consider
Rise30-, 20-, or 15-year fixed; 7- or 10-year ARM; 7-year balloon
Fall1-year ARM
Stay about the same1-, 3-, 5-, or 7-year ARM

 

How well do you tolerate risk?

Risk tolerationLoan programs to consider
Uncomfortable with vulnerability to interest rate fluctuations15- or 30-year fixed 10-year ARM
Comfortable with market changes 1-, 3-, 5-, or 7-year ARM; 5- or 7-year balloon