Which
Loan Is the Best For You?
It
really depends on how long you plan on owning your house and
what your financial goals are. |
| Time of Ownership |
Best Programs |
Explanation |
| 0-6 months |
1 month interest only arm, 6 month interest only
libor arm, option arm |
It makes since to pay interest only because
you will not live there long enough to make payments on your
principle. A shorter fixed term (1 month or 6 month fixed) will
provide the lowest interest rates. |
| 6 months – 1 year |
6 month interest only libor arm, option arm,
1 year interest only arm |
It makes since to pay interest only because
you will not live there long enough to make payments on your
principle. A shorter fixed term (6 months or 1 year fixed) will
provide lower interest rates. |
| 1 year-2 years |
Option Arm, 1 year interest only arm, 2 year
interest only arm |
It makes since to pay interest only because
you will not live there long enough to make payments on your
principle. A shorter fixed term (12 months or 2 years fixed)
will provide lower interest rates. |
| 2 years- 3 years |
2 year interest only arm, 3 year interest only
arm, option arm |
It makes since to pay interest only because you
will not live there long and do not intend to pay off the full
amount of the loan except when the property is sold. . A shorter
fixed term (2 years -3 years fixed) will provide lower interest
rates. |
| 3 years – 5 years |
3 year interest only arm, option arm, 5 year
interest only arm |
It makes since to pay interest only because you
will not live there long and do not intend to pay off the full
amount of the loan except when the property is sold. . A shorter
fixed term (3 years or 5 years fixed) will provide lower interest
rates. |
| 5 years – 7 years |
Option arm, 5 year interest only arm, 7 year
interest only arm, 5/1 libor arm |
It makes since to pay interest only because
you will not live there long and do not intend to pay off the
full amount of the loan except when the property is sold. Non
interest only loans with a shorter fixed rate are also appropriate.
A shorter fixed term (5 years or 7 years fixed) will provide
lower interest rates. |
| 7 years- 10 years |
Option arm, 7 year interest only arm, 10 year
interest only arm, 10/1 libor arm |
It makes since to pay interest only because
you will not live there long and do not intend to pay off the
full amount of the loan except when the property is sold. Non
interest only loans with a shorter fixed period are also appropriate.
A shorter fixed term (7years or 10 years fixed) will provide
lower interest rates. |
| 10 years+ |
15 year fixed, 20 year fixed, 30 year fixed |
Owning a home longer than ten years is considered
long-term. In this case, you will want a fixed rate for the
life of the loan. |
