A home loan purchase is the most important and most expensive contract most people will ever make. Because everyone has a different financial situation, lenders have created a variety of options to suit every borrower. Choosing wisely from the many types of home loan purchases available will help the borrower build equity and avoid debt. However, the many options may seem intimidating to new buyers.
It's always a lot of fun to tour houses, pick out the best features, and create wish lists for a dream home. The same amount of consideration should be put into the type of home loan purchase a borrower intends to take out before he begins shopping. The first aspect to consider is the length of time the buyer intends to stay in the home. If the buyer plans on living there for less than three years, he will probably choose an adjustable rate mortgage, which has lower rates. If a buyer will be in the house for more than seven years, he would benefit more from a 15-year or 30-year fixed rate mortgage, which has a higher rate but will not change over the years.
