With hundreds of types of mortgages, and thousands of lenders, how does the average consumer make sense of all of the choice and numbers? Much of it comes down to working with the right mortgage expert and asking the right questions. These two tactics can put you on the road to getting the most affordable mortgage aligned with your specific needs and financial profile.

In the mortgage loan business, there is no “one size fits all” when it comes to securing a loan. Each prospective home owner has their own unique financial profile that will impact what loan is right for them. There are fixed rate mortgages, 15 and 30 year mortgages; adjustable rate mortgages (ARMs), interest only loans, pay option ARM loans, loans with balloon payments, FHA loans, extendable balloons, Jumbo Loans, VA loans and many other options. How does the typical consumer make sense of all the choices?

Factors to consider when sizing up your current situation include:

• Considering current income.
• Estimating future income for the next year, three years from now and five years from now.
• Is your income fixed or variable from month to month or seasonal?
• Calculating realistic monthly expenses. Do you expect these to increase or decrease in the coming years? Are the expenses set or do you have some control in managing the expenses?
• Do you have outstanding debt in the form or credit cards, or car payments, or student loans? How long before this debt can realistically be paid in full?
• How long do you expect to stay in your home? Will it meet your family’s needs for the next 5 to 10 years? Do you expect the size of your family to increase or decrease in the coming years?
• Do you expect to stay in the local area for the foreseeable future? Is you job location stable, so you can assess commuting requirements?
• Property taxes and insurance have become more unpredictable in some markets. Do you expect these expenses to remain consistent over time? Are you concerned that local factors may cause these costs to increase?

A fixed rate loan provides the most stable, predictable payment structure for homeowners. 15 and 30 year fixed rate loans offer a consistency and predictability that many people prefer. For other people, who are comfortable with more uncertainty, and can benefit from lower initial monthly payments, an ARM can be an attractive option for them. ARMs provide lower initial payments, which are attractive to many people, but can be more expensive when interest rates are reset, typically after 2, 3 or 5 years. Interest only loans can be a helpful financial instrument, and is particularly attractive to real-estate investors. These loans should be secured only by people who fully understand the terms of the loan, and are prepared to meet the requirements of this type of loan.

Pay Option ARM loans are an important tool when a large percentage of income comes from commission payment. These loans are also appealing to self-employed people. Again, because of the sophisticated structure of these loans, and the possibility of negative amortization, these types of loans should be fully understood before electing this type of loan. FHA loans can help first time buyers or buyers who have trouble securing more conventional loans.

Your best bet is working with a mortgage professional who can guide your decision making process and help you in assessing your current situation and selecting the mortgage best suited for your individual situation.

Click here for a free no obligation quote or call 800.470.0099 to speak with a loan expert now.