Buying A Home Home Loans

How to Choose the Right Kind of Mortgage

Kristie McCauley
Written by Kristie McCauley

Choosing the right kind of mortgage is a lot like choosing a spouse. (That might sound like crazy talk, but hang in there with me for a minute.)

Like the millions of single men and women milling around out in the world, there are dozens of mortgage options from which you can choose. So, how do you know which mortgage is the right one for you?

Not like dating, picking a mortgage should not be by trial and error. When you date, you can go out with different people and quickly learn what you are looking for and not looking for in a spouse.

Uncovering which mortgage is the one you want to marry with the purchase of your home (or even a refinance of your home) should be a well-thought-out process that leads you to the best option for your personal financial situation.

1. Set Your Goals

“When you fail to plan, you plan to fail.” True story. Buying a home is a HUGE financial investment.

In fact, it is likely one of the biggest ones you’ll make in your lifetime. So, you have to set goals for it. One of the first goals you want to set is your intention with the home.

  • Do you plan to live in the home for the rest of your life?
  • Are you planning to raise your kids here and then sell and move into a smaller home?
  • Is this a starter home for the next five years and then you’ll upgrade to a larger, more spacious home?

Once you move out (if you move out) will you sell or keep the home and rent it out?

You might be wondering what all of this has to do with choosing the right mortgage. The answer is it has everything to do with the type of mortgage that you choose. The length of your stay in the home affects all of the decisions you make in choosing a mortgage, from the term to the type, and more.

About the author

Kristie McCauley

Kristie McCauley

Kristie Lorette McCauley is an award-winning expert on personal finance, mortgages, and credit. She has published articles on major finance and credit blogs, such as Yahoo! Finance, Quizzle, Money Crashers, and BankRate. She is also the author of books, such as How to Use the Equity in Your Home or Business Today to Invest for Tomorrow and How to Open & Operate a Financially Successful Personal Financial Planning Business.

12 Comments

  • I have a ch13 that I paid off early so I could get out of that hell. I am living in my rental property and want to purchase another house. My credit score is 688 now and going up. The ch13 was a huge mistake that I never should have filed! Now I am trying to find a lender for a new mortgage with zero results. Do you have any advice for me or ways in which I can find a lender? ……. To all of your readers and fans….whatever you do, try your hardest to avoid bankruptcy! It has ruined me ability to get a good interest rate on everything, if I get approved at all.

  • Terms on Commercial mortgage One Million Two Hundred thousand dollars. I am interested in seeing the math on a thirty year fixed mortgage are interest rates for commercial property around 2 1/2 percent somewhere under three percent. I also would like to see the math on 15 year fixed mortgage Commercial rates on $ 1,200,000 dollars.

  • I need extra help i know the home i would like tobe in. The probelm come in is my credit score. Iswithin hundred points for me to qualify for a loan. The type of home i am intrested in is a hud home foreclosure. I honestly need to speak with someone and not all this email so i can finally understand the steps i need to make on a home.

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