What Is the Right Mortgage for You?

Information you need today from Trump Mortgage

Of all the financial decisions you are facing today, which is the "make or break" one that will determine your financial security in the years ahead?

When I ask most people that question, the answers I usually hear are, "I better review my retirement accounts" or, "I have to pick the right place to retire."

Those are good answers. But if you want to guarantee your financial security in the decades to come, there is another critical decision that you have to make. You need to pick the right mortgage.

Of all the financial decisions that are on your plate, picking the right mortgage will have perhaps the greatest impact on your retirement, your net worth, and your family's future lifestyle.

So What's Your Game Plan?

Instead of comparing mortgage rates, the wisest way to pick the right mortgage is take a close look at your lifestyle and priorities.

If you plan to move or refinance within the next five to seven years, I would urge to you investigate Hybrid Adjustable Rate Mortgages, commonly known as Hybrid ARMs. These increasingly popular ARMS can offer the best of both worlds: lower interest rates (like most ARMs), but also a fixed payment for a longer period of time than most adjustable-rate loans.

You will also hear these loans referred to as 3/1, 5/1 or 7/1 ARMS. That sounds confusing, but it is really quite simple. For example, a 5/1 ARM has a fixed monthly payment and interest for the first five years. At that point, it converts to a traditional adjustable-rate loan, based on then-current rates for the remaining 25 years. It's a great choice if you expect to move or refinance before, or shortly after, that adjustment occurs.

If you will stay in your home for at least seven years, I would recommend one of these two classic options. They offer constant interest rates and monthly payments that will never change:

• A 30-year fixed-rate mortgage. As a rule of thumb, it may be harder to qualify for fixed-rate loans than for adjustable-rate loans. When interest rates are low, fixed-rate loans are generally not that much more expensive than adjustable-rate mortgages and may be a better deal in the long run, because you lock in the rate for the life of your loan.
• A 15-year fixed rate mortgage. This loan is fully amortized over a 15-year period and features constant monthly payments. It offers all the advantages of the 30-year loan, plus a lower interest rate - and you'll own your home twice as fast. Of course, the disadvantage is that, with a 15-year loan, you commit to a higher monthly payment. As another option, many borrowers opt for a 30-year fixed-rate loan and voluntarily make larger monthly payments that will pay off their loans in 15 years. This approach is often safer than committing to a higher monthly payment, since the difference in interest rates isn't that great.

If your income varies throughout the year due to commissions or bonuses, consider a negative amortization mortgage, also know as a "Neg Am" loan. This deferred-interest loan is very powerful, but it is also the most misunderstood mortgage program out there today. Basically, the lender allows you to make monthly payments that are less than the accruing interest. Therefore, if you choose to make the minimum monthly payment, the loan balance will increase by the amount of interest not paid on the loan. The power of this loan lies in your ability to choose between making the full loan payment each month, or the minimum payment - or any amount in between. So if your income varies throughout the year you can make a lower payment during the "lean times," and then make higher payments when funds are readily available.

There are other options available too, of course. If you'd like to know more, visit Trump Mortgage online. Our mortgage counselors (call 1-888-79-TRUMP) are also available to answer your questions about which kind of mortgage is right for you. And there is no obligation for calling, of course.

EJ Ridings is President of Trump Mortgage,a new kind of lending institutiondedicated to exceeding expectations for superior customer care, timely transactions and maximum value on investments. The Trump Mortgage team, part of the Trump University family, is wholly committed to making sure that every loan and every client receives nothing less than the full "Trump" experience-integrity, honesty, safety, and exceptional personal service.

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