Robyn Seymour - 0081- 3 Steps for Choosing a Type of Mortgage.doc

"What type of mortgage loan should I choose?" This is one of the most frequently asked questions when buying a real estate property. This is not a good question for one person to answer on behalf of another. It's just too big of a decision to be made by anyone other than the actual mortgage applicant. So I've taken the liberty of creating a 3-step process to help you answer this question for yourself. Here's how to decide which type of mortgage loan is right for you:

Determine your mortgage profile:
First, write down your answers to the following questions. (A) How long do I plan to live in the home? (B) How much can I afford to put down up front? (C) How much can I comfortably afford to pay on a monthly basis?

Study the mortgage types:
Next, you'll need to do a bit of homework to understand the different types of mortgage loans. If you visit HomeBuyingInstitute.com, you'll see a menu item labeled "Types of Mortgages." This is a great place to begin your mortgage research. When reading about types of mortgages, pay careful attention to any sentence that starts with "This mortgage might be a good idea for you if..." Also pay attention to any pros and cons mentioned for each of the mortgage types.

Math your mortgage profile to a mortgage type:
Now that you know (A) more about your mortgage "profile" and (B) more about the types of mortgages, you can take the next logical step -- matching your profile to a particular type of mortgage loan. For instance, if you know you're only going to be in a home for less than three years and you want to minimize your monthly payments as much as possible, then an adjustable rate mortgage (ARM) might be the way to go. This is just one example of matching your mortgage profile to a type of mortgage. You can analyze the pros and cons of each type of mortgage loan once you recognize your own profile.