What type of morgage should I get?

Question

I am under a contract and already approved for a home loan. I have asked many different brokers, morgage consultants and my personal banker about which morgage option is best for me. I have the 20% cash to put down on this 300K home. I am not sure if I should go with a 30 year fixed, 15 year fixed or an interest only and keep some of my money each month. I am perplexed!!! I do not know how long I will stay in the home maybe up to 5-10 years...Just not sure!
Thanks,

Answer 1

First of all, unless you are very very disciplined saver the interest only loan is a bad choice. It will not get you anything unless you are looking to flip this house in a short amount of time. I would probably choose if you have the means a 15 year mortgage as you would be in debt not as long of a time but it depends on if you can afford to live comfortably and make the payments.

Answer 2

The purpose of buying a home is to own it, and that means getting equity in it.

Interest only loans = zero equity. You might as well be renting the home. If you move and want to sell it, you'll gain nothing unless it appreciates substantially.

Supposing you want to retire in this house, or sell it and walk off with a chunk of change, a 15-year fixed is the best bet. If you're young enough, a 30-year fixed is OK, but the final cost of the house will be substantially higher. Mortgage is a system where you can pay $500K for a $300K house and never actually realize it.

We did a fifteen-year fixed, paid it off ahead of time, and it's a great feeling.

Good luck. See you at Home Depot on the weekends....

Answer 3

I would go with a fixed rate loan as interet only gets you nothing, it is like renting. As for the 15 or 30 year option, it depends on what you can afford each month. Another option people have not mentioned is going with the 30 yr option and then making bi weekly or twice monthly payments. These options allow you to make extra payments each year without really noticing, thus paying down your principle faster and saving $$ on interest and shaving years off your loan.

Answer 4

While the best answer to your question depends upon all the factors such as income, life style, and what will the market do, to play it safe, go with a fixed mortgage. While rates are low now, they tend to rise and many people have gotten into a bind with one of the flex mortgages as the interest rates rise.

As to whether to go with a 15-year fixed or a 30-year fixed, the main factor is your income and life style. After all, the 15-year fixed will result in paying much less in interest, but if the monthly payment is just too much, go with the 30-year fixed. As the monthly payments with fixed mortgages will remain constant, an increase in income will mean paying a smaller percentage of income to the mortgage. However, taxes and insurance, as well as utilities, etc., will, over the long haul, rise, taking up a larger percentage of your income.

Answer 5

no person else is asserting this so i visit - do not do it. purely because of the fact a economic corporation can provide a private loan for this quantity does not mean that's stable for you. in case you have not have been given any funds to place down and you're mortgaging your self to the max it would desire to be your downfall. you want some funds someplace to attend to each and all of the unpredicted issues - maintenance, job lay-offs, automobile issues, medical institution expenses, etc. in case you quite need that domicile pass out and get a 2nd job for the subsequent six months. Sock away each and every extra advantageous dime and are available up with a minimum of a partial downpayment. confirm you have an emergency fund. i understand its confusing yet i've got been there and that i could by no skill guidance everyone to return into the placement. that's depressing.

Answer 6

I found some good info here.