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 property | Loan programs to consider | | 1-3 years | 1- or 3-year adjustable rate mortgage (ARM) | | 4-6 years | 5- or 7-year ARM; 5- or 7-year balloon | | 7 years or more | 10-year ARM; 15-,20-, or 30-year fixed rate mortgage |
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 |
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