Hello and

welcome to Moneygirls quick and dirty tips for a richer life.

Today's topic, fixed versus adjustable mortgages.

Anne from New Jersey called in with this question.

Hi, money girls, this is Anne from New Jersey.

I was wondering if you had any tips for how to negotiate a first

mortgage on a first home purchase. I have basically no experience in this area

and I just want to make sure that I'm as informed as possible.

Thanks.

Hey there, Anne, thanks for the great question.

It's a big question that people have actually written entire books to answer and I'll be giving away one of these books in a few moments

but first here's a quick and dirty tip about one aspect of picking the right mortgage.

First you'll want to decide what type of loan suits your needs best.

Lones fall into two basic categories, fixed and adjustable.

To get clear about the type of loan that's right for you, ask yourself the following question,

how long do I plan to keep my loan?

This key question is the one that will influence your choice of loan type. Do you plan to keep the loan in the house for a very long time?

Do you think you'll want to refinance after a few years to pull cash out of the property or for some other reason?

Do you think you might sell the house in a few years to get a larger

one or to downscale to a smaller one? If you plan to keep the loan for a very long time, say several

years or longer, a fixed rate loan would be a reasonable choice

since fixed rates are still at relatively low levels historically.

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