Pull into any planned living community in the U.S.A, and you may make the unfair judgment that everyone there is identical because the houses all look alike. But beneath the coordinating exteriors, you will find a slew of colors, life style choices, personalities and mortgage loan types suited to the needs of the owners. For instance, while Joe and Bonnie favors a fixed mortgage loan, their neighbors Jill and Rich found that the best mortgage loan type for them was an adjustable rate mortgage.
From the get go, Joe and Bonnie knew that the next home they bought they would be be living for decades. Their home buying process began with:
- calculating how much home they could afford
- investigating the local school district
- investigating nearby parks
- making sure the home was large enough to raise a couple of kids
Since they plan on being in their home for the long haul, the best mortgage loan type for them was a traditional 30 year fixed rate mortgage loan. They wanted the predictability of fixed payments and wanted to lock in their interest rate as they qualified for a historic low.
Although Rich and Jill also qualify for an historic low for their mortgage loan rate, their best mortgage loan type was an adjustable rate mortgage. Rich and Jill love owning property, but tend to live more on the nomadic lifestyle as they like to move every few years "just to mix it up." In their case, they opted for a ARM loan as the promotional introductory mortgage loan rate, was even less money than the traditional fixed rate loan. They know that they only have a few years until the interest rate resets, and so they plan on listing and selling the house in ample time.
As everyone is different, there is no one best mortgage loan type. Each prospective home buyer needs to analyze their housing goals and behavior by doing the research on all the different types of mortgage loans and then make the decision on their personal decision on what the best mortgage loan type for them would be.
