After you interview your mortgage broker or lender and ask the tough questions, what do you do with the answers? How do you know if the answers you receive are applicable to your situation? Here are the answers acceptable to most borrowers.
1. Answers to Which Type of Loan is Best
Look at the point spread between the interest rates offered on fixed-rate mortgages versus those on adjustable-rate mortgage loans. If the difference is small, say, around .5%, you would be better off with a fixed-rate mortgage.
Interest-only loans are a popular option if you decide to stay in the property for a long period of time, more than five years. Otherwise, the property may not appreciate enough to provide you with adequate equity to sell if you choose this option for a short-term residency.
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