Another point to consider is what the housing market will do while he is in his house. If interest rates appear to be on rise, he will want to lock in a fixed rate. If interest rates are dropping, then an adjustable rate will save him money. Although experts have difficulty in predicting the future of the home loan purchases market, a smart shopper can estimate interest rates pretty easily by doing a little research into the current trends.

Some people wonder if it is more important to build equity quickly or to minimize payments on a house. Several different pay-off plans are available to meet home loan purchase goals. To build equity quickly, a buyer will want a 15-year or 20-year mortgage with a fixed rate. If he is going for the luxury home but needs lower payments, the 30-year, fixed rate mortgage is best.