Shopping for a mortgage is like buying a suit: One size does not fit all.
When it comes to choosing the length of a mortgage, consumers have more choices than ever. The most popular
loans are still the 15- and 30-year fixed mortgages, but few buyers realize that they can also shop fixed-rate loans in other
five-year increments that span 10, 20 or 25 years. Or they can adjust the length of their mortgage by paying additional principal
as they go along. And some elect a 40-year mortgage to capture the house of their dreams.
About 35 percent of home buyers are going for hybrid loans, which offer a few years of a fixed rate before switching
over to an adjustable rate, says Doug Duncan, senior vice president and chief economist with the Mortgage Bankers Association,
an industry trade group.
With so many options, how do you select the right one for you?
The three basic things to consider: What's the best rate you can get? How much is the monthly payment?
And, most important, how does the payment and payoff date fit in with your financial plans?
