What Type of Home Loan Should I Get?
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Deciding what type of loan to get is a major decision in the mortgage process. You will need to choose between a fixed rate mortgage and an adjustable mortgage. In addition, you will need to determine what type of loan term you would like.
| ● If you are planning on moving in a few years, you may want to go with an adjustable loan, which will offer you a much lower interest rate. However, if you plan to stay in your home for a long time, it is much safer to choose a fixed loan at a higher rate. |
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30 Year Home Loan |
| Advantages: Your monthly payments are low, since they are spread out over a long period of time. If you have low monthly payments, you also have the opportunity to pay additional money that would be applied directly to the principal. This could allow you the flexibility to have low payments if you are having cash flow problems, but you could also pay the loan off quicker, which would save you a great deal of money over the term of the home loan. |
| Disadvantages: If you do have the cash flow to consistently pay the extra money each month, you could do a 15 year mortgage, which would give you a lower interest rate over the term of the loan. |
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15 Year Home Loan |
| Advantages: You will get a lower mortgage rate with a 15 year loan compared to the 30 year loan. This will save you a great deal of money in interest. |
| Disadvantages: You will be required to pay higher monthly payments, which gives you less flexibility. If you have money problems due to unforeseen circumstances, it may create problems. |
You may also want to consult your banker or a Mortgage Broker, to get additional advice on what loan term is best for you.
If you would like information on VA Loans, you may go to the VA Loan Center or the offical VA Loan site.
Get information regarding Mortgage Rates