30 Fixed Rate Mortgage NOT for Everyone

Choosing a loan can be simple- you need to ask yourself what is my 5, 15 or 30 year plan? Am I going to live here for a few years, is my family size going to grow or decrease, am I retiring, or unsure what your going to be doing. One thing is for sure banks are scared of getting burned with crazy mortgage options, but choices are still available with a conservative approach.
  • If you know you will be moving in less than 5 years- a 5/1ARM would still be your best option. This loan is fixed for the first 5 years but will jump if you don't sell by the 5th year. This loan is still a risk in a shaky market so have a cash cushion just in case.
  • If you want to build equity faster and may be retiring- a 15 year fixed rate loan is your best option. Not only do you get a break in the interest rate but you save big in long run. You can save an estimated $177,000 on a loan of $300,000.
  • If you have little down and uncertain of future plans - a 30 year fixed rate loan is the best option.. these loans allow you to pay a comfortable mortgage payment and allow lower down payments- FHA loan allows borrowers to put down as little as 3.5%. This loan currently is the most popular option.

So as your shopping for your loan ask for a comparison of what your options are and discuss what is right for you. Be educated and make a choice that fits your mortgage needs.

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