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Purchasing a home is the single largest expenditure you will make. Therefore, the financing of your home should be managed with great consideration.
There are many different loan products available today and it is often difficult to pick the one best suited toward your financial goals. By answering the following questions, you'll get a feel for the best loan for your financial situation.
How Long Do You Intend to Occupy This Property?
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 |
Adjustable Rate Mortgage (ARM) - A mortgage in which the interest rate is adjusted periodically based on an index. Also known as the renegotiable rate mortgage, the variable rate mortgage or the Canadian rollover mortgage.
Fixed Rate Mortgage - A mortgage on which the interest rate is set for the term of the loan.
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