Getting a mortgage is a long commitment usually covering 15 to 30 years of your life. That is why, all financial factors about yourself must be considered before you get a mortgage.
Consider your financial situation at present and your housing needs if they may change in the future while you are still linked with your mortgage. You can ask these questions to help you:
(1) How long do you think you plan to stay in your home?
(2) Is there any expectation of your financial revenue to increase over time to enable you to afford paying more for your mortgage?
(3) What do you think are the major expenses you could do in the future that could affect your ability to pay your monthly interest? College tuition, investment in small businesses, insurances, etc. are examples of these.
Then assess the level of risk you’re willing to take or convenient to take. Be sure to decide on what mortgage rate you think you can constantly pay for seriously. Adjustable rate is risky because interest rates change more often. Fixed rate will always be more secure because it is stable.
The third step is to determine the length of time you need to pay for the loan. Most terms are 15, 20 and 30 years. Usually, a shorter term means higher monthly payments. This is good for people whose income are higher than average and are stable. But average income people prefer long term because the later periods of small monthly bills can suit their budgets.
The last step is to assess the costs of closing a mortgage and lower interest rates you can get.