Are you happy with your job or confident you won't change jobs soon?
If not, you may want to invest in a property with good resale value and a loan that ties up a minimal portion of your income.

Are you planning home additions or repairs?
If you think you will need to get money for upgrading your home you may want to get the lowest possible rate and fees with an ARM and plan to refinance when you are ready to make the upgrades to your home.

Do you expect interest rates to go up or down in the future?
Some borrowers believe that interest rates may go up in the future. In that case you may want to consider selecting a fixed interest rate. If you think rates will go lower an Adjustable Rate Mortgage may save you money.

What are your long-term financial goals?
A mortgage is a form of fixed savings, and you get a payback in the form of a mortgage interest deduction, but you may need to invest more cash in areas that have a bigger return. You may shortchange your retirement savings plan if you put the bulk of your resources into a home loan.

The Portfolio Advantage
Portfolio lenders are lending institutions that don't resell their loans on the secondary mortgage market. They can be more flexible about loan terms and qualifications because they don't have to follow secondary-market rules. It's harder to qualify for loans intended for sale, because they must conform to rigid guidelines.

For example, Freddie Mac and Fannie Mae won't permit all of the down payment to be a gift if the borrower is applying for a 90 percent loan, but some portfolio lenders will.

A portfolio lender may also Fund a loan for an "as is" property In fact, a portfolio lender may be your only option. Properties sold "as is" almost always need major work. Some portfolio lenders will allow funds from the seller's proceeds to be held in an account to complete repair work after closing. Loan programs following Freddie Mac and Fannie Mae guidelines may not allow holdbacks for such work.