The Best Mortgage For You

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Every person and every family is different which is why we have lots of options for mortgage loans. Just because most people take a 30 year fixed mortgage doesn't mean you have to take a 30 year fixed rate mortgage. And even though your neighbor says Adjustable Rate Mortgages (ARMs) are the worst thing ever; doesn't mean it's true. And even though more than one "finance" guru says you shouldn't take a mortgage loan that has  term longer than 15 years doesn't mean that advice applies to you. 

Are you picking up on the theme?

The fact is that just because one product is bad or good for one person doesn't mean another person will experience the same thing which is why you need to determine what's important to you. Taking some time to answer a few tough questions could save you tons of time and money. When you're obtaining a new mortgage saving time and money is important!

What Is The Best Mortgage:

Who is asking? That has to be the answer/question to that. If you are someone who likes to travel, shop or other quality of life things than a 15 year fixed mortgage rate is probably not for you. And I'm not talking about lavish spending; average stuff like a vacation once or twice a year. Because a 15 year fixed mortgage is going to have a much higher mortgage payment than a 20 or a 30 year fixed mortgage payment.

Is your focus paying off your house and you don't really care about vacations, having a nicer car or shopping for new clothes? That person should consider a 15 year fixed rate mortgage provided the payment easily fits into the budget.

First Time Home Buyers:

Some people will say I'm wrong but I strongly encourage First Time Home Buyers to avoid a shorter term mortgage unless that payment is less than 20% of your monthly income. The reason is that home ownership is expensive; give yourself a year or two to see what it's like without being under the gun because you need to purchase a new furnace AND a new water heater.

Keep in mind you can always pay more with a 30 year fixed rate mortgage. In fact making two to four extra payments per year will significantly reduce the number of years you are set to pay.

The second thing I would suggest for First Time Home Buyers is to avoid an Adjustable Rate Mortage. They are right for some people but not right for everyone. Until you've experienced home ownership it's best to stick with the 25 or 30 year fixed mortgage rate term. And if you want to pay extra so that the balance goes down faster you can.

Comments (1)

John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Kevin O'Connor very good report about best mortgage programs.

Dec 29, 2019 08:20 PM