"I Always Ask, How Long Do You Plan on Keeping the Home You Want to Purchase?"

Very few prospective home buyers would ever think about anything but a 30 or 15 year fixed rate loan.But its not always the right answer for many that don’t plan on being in the home for more than 5 years.

The 30 year amortization, with the rate fixed for 5 years these days are about 3.375% and 7 year fixed is 3.5%. That would be about a $100 per month for over 5 years, that is $6,000, Is that money not better off in your pocket?

An adjustable rate mortgage is not for everyone, but twice this week, when I introduced the option the clients were delighted with the idea. In one case, the folks are expecting a large inheritance within the next 2-3 years and then will want to take some of this money to pay down the loan and refinance into a 15 year mortgage. In the other case the folks are selling a property in a state that they are seeing properties taking a year or more to sell and at the lower rate can afford to carry the property until the property is sold. Again, these folks will want to refinance into a 15 year mortgage once the property sells.

As I’ve said not for everyone, but an adjustable rate mortgage is a good solution. I always want to make sure I am putting my clients into the best possible position.

image courtesy of renjith krishnan/freedigitalphotos.net