How should I choose a mortgage?

How should I choose a mortgage?

Janet Bodnar (Deputy Editor, Kiplinger’s Personal Finance) gives expert video advice on: How should I choose a mortgage?

One way of choosing a mortgage is by calculating how much you think you can fit into your budget comfortably. You don't necessarily want to go for the most money that you can qualify for. So, choice number one is to buy what you can fit in your budget, and choice number two is between a fixed rate and variable rate mortgage, which kind of depends on some factors like how long you are going to be in the house. For example if you know that you are going to be there for couple of years and then transfer to another job, a very low rate mortgage might make sense because it is very possible that you would be moving from the house before the rate even adjusts. So in this situation if you can get a lower rate on a variable rate loan than you can on a fixed rate loan then a variable rate mortgage might make more sense. If, however, you know that you may be there for next seven, eight, or ten years you might want go with the fixed rate loan, and you would want to shop around for the best you could find on that.