How to Choose the Right Loan
There are many different loan products available today and it is often difficult to pick the one best suited to your financial goals. By answering the following questions, you’ll get a feel for what’s best in your financial situation.
| Length of stay in property | Loan programs to consider |
| 1-3 years | 1- or 3-year adjustable rate mortgage (ARM) |
| 4-6 years | 5- or 7-year ARM; 5- or 7-year balloon |
| 7 years | 10-year ARM; 15-,20-, or 30-year fixed rate mortgage |
Would you prefer a lower payment or more rapid accumulation of equity?
| Financial goal | Loan programs to consider |
| Equity buildup | 15- or 20-year fixed |
| Minimize payment | 1-, 3-, 5-, or 7-year ARM; 30-year fixed |
What do you feel interest rates will do in the future?
| Overall I believe interest rates will | Loan programs to consider |
| Rise | 30-, 20-, or 15-year fixed; 7- or 10-year ARM; 7-year balloon |
| Fall | 1-year ARM |
| Stay about the same | 1-, 3-, 5-, or 7-year ARM |
How well do you tolerate risk?
| Risk toleration |
Loan programs to consider |
| Uncomfortable with vulnerability to interest rate fluctuations | 15- or 30-year fixed 10-year ARM |
| Comfortable with market changes | 1-, 3-, 5-, or 7-year ARM; 5- or 7-year balloon |
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