What mortgage is right for me?

This is one of the most important questions you can ask; What mortgage is right for me?  Fixed rate mortgage or adjustable rate mortgage?  15 year fixed mortgage or a 30 year fixed mortgage….and the questions about “what mortgage is right for me” go on and on and on.  Unfortunately there are no easy answers; just because one type of mortgage was good for let stay your parents….doesn’t mean that is the right mortgage for you.  

Each borrower is different with a different set of needs when it comes to discovering the answer to “What mortgage is right for me?”.  That being said; there are some basic steps you can take to help you decide what mortgage is right for you.

mortgageThe first question you should ask is  – How long do I plan on living in the house and/or how long do I plan on keeping the loan?  If you say that this will be the last home you ever buy and that you never what to do another mortgage again; then you should really only look at fixed rate mortgages.  10 year fixed rate mortgage loans all the way up to a 30 year fixed rate mortgage loan (ie there are 15, and 20 year fixed rate mortgage loans as well).  

So if you’ve settled on a fixed rate mortgage then you need to decide how long you want to have the loan (for both a refinance or purchase loan).  This is where your personal short term, medium term and long term goals come in to play.  If you want a low payment; a longer tax benefit with the IRS then go into a 30 year fixed rate mortgage.  If you want to pay the house of early then it’s a 10 or 15 year fixed rate mortgage.

Now if you are only going to live in the home for a few years; less than 5 then you should consider an adjustable rate mortgage.  There are 5/1 ARMs, 7/1 ARMs and 10/1 ARMs….the first number is the number of years the mortgage rate is fixed; the second number refers to how often it can adjust after the fixed period (this example refers to “1” so that means it can adjust once every year after the fixed rate period is up.  So as you can see figuring out “What mortgage is right for me?” can be a bit difficult but if you take the time to review options I’m sure you’ll come up with a great plan.  

And if you have any questions are need some assistance please be sure to ask; you can contact us directly at 1-800-550-5538 and we can go over which mortgage is right for you and how to get a low mortgage rate in California.  We offer both fixed rate and adjustable rate mortgages for both purchase transactions and refinance transactions.  For those that qualify we also offer a true zero cost mortgage (zero points and zero fees).