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Loan Rates and Types

Many people are fixated on, well, 30 year fixed rate mortgages. But what are the odds that your first home will be one you live in for 30 years? The average home owner moves every three to seven years - so why focus on a 30 year fixed rate? We suggest you take a look at interest-only loans, with a fixed rate for between three and seven years.

Interest only, you say? How will you pay off the property? The answer is, you don't - you will sell (or refinance) it before your loan terms is up. With a fully amortized 30 year loan, very little of the principal is paid off in the first three to seven years. The huge bulk of the equity you will build up in that time period will come from appreciation in your home's value, not from paying back the principal on the loan.

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