Choosing a Mortgage Type
Below is a chart of mortgage types which includes both their advantages and disadvantages.
Loan Type |
Advantages |
Disadvantages |
30 Year Fixed Rate |
• Interest rate never changes. |
• High down payment required. |
15 Year Fixed Rate |
• Interest rate never changes. |
• Higher payments. |
10/1 Adjustable Rate |
• Interest rate fixed for 10 years. |
• After 10 years interest rate adjusts. |
5/1 Adjustable Rate |
• Interest rate fixed for 5 years. |
• After 5 years interest rate adjusts. |
2/1 Adjustable Rate |
• Very low introductory rate. |
• Interest rate only fixed for 2 years. |
Choosing the best mortgage type should be based on your specific situation. This includes your ability to pay off the loan in a given time, when you expect to sell your home, and what payment you can afford. In order to protect yourself financially, it is highly recommended that your mortgage rate is fixed for at least as long as you plan to be responsible for the loan payments.
Before you apply, understand the process...
- Mortgage Introduction
- Understanding Your Financial Situation
- Choosing a Mortgage Type
- Shopping for a Mortgage Company
- Getting Your Mortgage Purchase Loan Pre-Approved
- Taking Advantage of Realtor Services
- Finalizing Your Purchase Mortgage Loan
Why is Mortgage Purchase Loans non-bias?
The only funding this website receives is via Google Advertisements. We are not directly affiliated with any mortgage company and although we encourage you to shop with our websites sponsors, we do not recommend any specific bank or mortgage company.