There is not a one size fits all formula for selecting the perfect loan for you and your family. There will be many factors that will come into consideration. For example:
Your current financial picture
How you expect your finances to change
How long you intend to keep your house
When choosing the right loan program, it is important to look at the bigger picture surrounding your finances. Many consumers tend to fixate on the 30 year fixed programs because they have not been properly exposed to the numerous loan programs that are currently available to them. Factors such as length of time you plan on being in your home, your current credit situation, current debt, and income will play a large role in selecting a tailor made loan program to suit your needs.
Choosing the right loan program is just as important as the interest rate associated with a loan. The loan program that is right for you may not be right for someone else. Each borrowers situation is different dependent on several different factors. These factors need to be looked at in their present state as well as with a vision toward the future.
When choosing your loan program, your first consideration should be how long you plan to stay in the home. The second is if you plan to pay off the mortgage, how quickly you want to pay it off. Other considerations may include job stability, cash flow, and future goals.
If you want to move into a home with a price slightly above what you can afford now, and you expect your income to increase in the next few years, a mortgage with an "Interest Only" feature may be what you need. With an "Interest Only" mortgage, you make the monthly payments for the accrued interest, but you don't have to pay down the principal. Therefore, the monthly payments are lower than that of a fully amortized mortgage. The "Interest-Only" loan allows a home buyer to purchase the house he otherwise cannot afford.
One of the most popular loan programs of the last two years is the Payment Option ARM or Adjustable Rate Mortgage, also called the 12 Month MTA. With deferred interest rates beginning at as low as 1.00% and the ability to pay off the loan at the pace of your own choosing, these are incredibly popular mortgage loans for investors and customers looking to purchase or refinance their home mortgage. Contact one of our mortgage specialists today, and they can tailor a loan to best fit you needs.
