“What’s the Best Loan for Me?”
Many first-time (and subsequent-time) homebuyers are faced with this question today: what’s the best home loan for them? Sure, they’ve heard about interest only loans and hybrid loans and a very popular refinance loan of 15 year fixed instead of the 30 year fixed because they get to pay lesser interest and pay off the mortgage sooner. But deciding the right one for their situation is tough.
For instance, consider the person who has been transferred and wants to live there for about 7 years. He knows for certain, he will not live in the place for more than ten years. Should he still get a thirty year fixed rate, just because these are uncertain times for rates? Or should he do something else?
I think a good mortgage broker should be able to sit down with you and work the numbers depending on your situation. Take a look at this post in the Mortgage Reports which talks about how only after half the loan is paid off does the 30 year fixed revert to making more payments on principal rather than interest. In this case, wouldn’t it make sense for the person who is buying a home to live in it for only 7 - 10 years get a hybrid loan, fixed for 10 years? Shouldn’t he at least consider it, instead of reverting to the knee-jerk 30 year fixed?
