Choosing A Mortgage That Fits Your Lifestyle

Choosing a​ Mortgage That Fits Your Lifestyle
There are many different types of​ mortgages with a​ plethora of​ features and fees .​
Choosing the​ right kind of​ mortgage based on​ your life style could not only make it​ easier for you​ to​ repay the​ loan but also save you​ thousands of​ dollars.
First,​ make an​ honest assessment of​ your financial position .​
Do you​ have a​ stable job? If you​ are in​ business,​ does it​ yield you​ a​ regular profit? Calculate your gross income .​
If you​ have a​ very low income that deters you​ from saving anything then you​ would do well to​ opt for a​ low down or​ no down payment mortgage .​
If your income is​ good enough to​ have allowed saving for the​ down payment its better that you​ make 20% or​ more down payment .​
The less you​ owe the​ better.
Are you​ sure that you​ can repay your loan after a​ sudden loss of​ employment? on​ the​ other hand,​ if​ you​ as​ a​ couple are repaying together,​ what if​ your spouse loses their job,​ can you​ still manage it? a​ longer amortization period (30years) would mean that you​ pay a​ smaller amount monthly that would be lighter on​ your monthly budget .​
Also,​ remember that you​ pay a​ higher interest and a​ larger amount overall incase of​ mortgages that are spread over longer periods .​
a​ shorter (15years) amortization period would mean that you​ pay a​ larger monthly installment,​ but a​ lower interest rate and hence a​ smaller price for the​ house.
A job that pays you​ bonuses,​ or​ retirement benefits where a​ lump sum amount is​ expected can be helpful in​ making large down payments or​ clearing balloon mortgages.
Choosing between a​ fixed rate loan and one with an​ adjustable rate is​ always a​ gamble .​
If the​ fixed rates are low now,​ it’s better to​ go for that option .​
The choice between ARM and FRM is​ based on​ the​ wider economic outlook,​ whereas the​ choice of​ mortgage is​ more dependent on​ your financial situation.
Mobility is​ another factor that has to​ be actively considered when deciding about mortgage .​
Will your job require you​ to​ move away from your current place of​ residence to​ another? Do you​ see yourself out of​ a​ house in​ 4-5 years? Alternatively,​ you​ do not intend to​ move out of​ the​ town/city where you​ live,​ for the​ rest of​ your life .​
a​ short stay may not work in​ favor of​ buying a​ house altogether,​ unless rent prices in​ the​ area where you​ live is​ higher and real estate prices are appreciating faster .​
If you​ plan to​ sell the​ house in​ 5 years and move out then opt for mortgages where the​ interest rate is​ lower in​ the​ first few years of​ the​ mortgage .​
Better still go for interest only mortgage where you​ pay only the​ interest for the​ five years you​ stay in​ the​ house .​
ARM mortgage loans are also suitable for short home owning periods .​
The rate in​ ARMs is​ very low during the​ first few years .​
Definitely,​ the​ interest/interest+principal paid will be less than the​ rent you​ would have paid .​
People who want to​ move to​ a​ bigger house after a​ few years can also consider these mortgages.
It will be assumed here that you​ have thought well about the​ kind of​ property you​ have decided to​ buy .​
Just make sure that you​ are entering into a​ debt with complete understanding of​ all the​ pros and cons.

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