Fixed Rate

Christy needs to get on a 15-year fixed rate. They should not do an adjustable rate or a balloon.

QUESTION: Christy is about to go into house debt since they are relocating. She wants to know Dave’s opinion on the kind of mortgage that they should do. They don’t have enough to put 20% down for a house payment. One of their options is an adjustable rate mortgage.

ANSWER: You aren’t ready to buy this house. Put it on a 15-year fixed rate. If you have to pay private mortgage insurance, then so be it, because that’s the price you pay for being in this situation. DO NOT DO an adjustable rate or a balloon. You can pay the bill on a 15-year, and the rate won’t go up on you or balloon on you.