There are many options for your mortgage loan. Deciding which mortgage is right for you will depend on your financial goals. Here are questions to help you decide which type of mortgage is right for you.

Question #1: How Long Do You Plan on Keeping Your Home?

The length of time you plan of living in your home will influence the type of mortgage loan you should consider.

If you plan on staying in your home for:

One to Three Years: Consider using an Adjustable Rate Mortgage with a term length of 1-3 years.

Four to Six Years: Consider using a seven year Balloon Mortgage or an Adjustable Rate Mortgage with a term length of five to seven years.

Seven to Ten Years: Consider an Adjustable Rate or Fixed Rate Mortgage with a term length of fifteen or thirty years.

Question #2: Do you need the lowest monthly payment possible or is your goal to build equity in your home as quickly as possible?

To build equity in your home quickly, choose a mortgage with a shorter term length such as fifteen or twenty years. If your budget requires the lowest payment possible choose a mortgage with the longest term length such as thirty or forty years with an adjustable interest rate.

Question #3: What is Your Tolerance for Financial Risk?

If you have a low tolerance for risk in your finances you should stick to traditional mortgages with fixed interest rates. If you have the stomach for moderate financial risk you could save yourself some money with Adjustable Rate Mortgages including interest only or option loans. To learn more about your mortgage options and how to avoid common homeowner mistakes, register for a free mortgage guidebook using the links below.