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Which Mortgage Loan is the Right Home Loan for You?
By Sheryl Landrum
CMR Columnist
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Buying a new home or refinancing an existing home mortgage costs money. Most homeowners agree that they would like to minimize the amount of refinancing or new home purchases they take on. However, when interest rates are great, sometimes purchasing a new home or refinancing a home loan is too tempting to pass up. But when you are looking for a new home loan, how do you know what mortgage program is best for you?
Knowing your mortgage plan can help you save money.
While the interest rate on a thirty-year mortgage is fixed and offers the most stability, it might not be the best home loan for you if you plan on refinancing or selling your home in a couple of years. If you expect to keep a home loan for only a few years, an interest-only or adjustable rate mortgage (ARM) may be your better home loan. Generally, interest-only or adjustable rate mortgages allow you to reduce your mortgage payment and may save you money each month or allow you to afford a more expensive house.
If interest rates are low and your future housing needs are uncertain, you may just want to take a thirty-year fixed rate mortgage. Maybe you will move in a few years and sell the house, or perhaps you will want to keep it as a rental. Budgeting is easy with a thirty-year fixed home mortgage loan, as the payments are always the same.
Whichever mortgage loan you choose, take some time to learn about the benefits and risks that each one offers. Doing so can save you a lot of money now and in the future.
About the Author
Sheryl Landrum is a senior loan officer with First Capital Mortgage of San Diego, California.
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