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Lets face it, there are a lot of choices when it comes to choosing a home mortgage. We all know that they come in many shapes and sizes and so deciding which loan makes the most sense for your financial situation and goals means understanding the benefits of each. There are 3 basic types of home loans. Each has very different reasons why you should choose them.
Fixed Rate Mortgage - 30 Years, 20 Years, 15 Years
This Type Of Loan May Be Right For You If: |
| - You plan to live in your home more than 5 years. |
| - You like the stability of a fixed principal and interest payment. |
| - You don't want to run the risk of future monthly payment increases. |
| - You think your income and spending will stay the same. |
Adjustable Rate Mortgage
This Type Of Loan May Be Right For You If: |
| - You plan to stay in your home less than 5 years. |
| - You don't mind having your monthly payment periodically change by either going up or down. |
| - You are comfortable with the risk of possible payment increases in the future. |
| - You think your income will probably increase in the future. |
Combination Rate Mortgage
This Type Of Loan May Be Right For You If: |
| - You want the stability of a fixed principal/interest payment in the short term. |
| - You want to demonstrate your ability to make regular payments, then refinance. |
| - You have a lot of consumer debt. (typically these loans allow more debt) |
| - You want to borrow more and get a lower monthly payment than a standard fixed rate loan. |
Remember each type of loan has different reasons why you should or shouldn't choose them. The best thing to do is do some research before applying, so you will know what type of these loan best fits your needs. Be sure to read our "Guide To Skillful Borrowing" tips. |
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