I'm beginning today's blog with a quote:

In the past I used to tell people to look at different mortgage rates for different loan products and determine what was best for them. If they were planning on moving soon a 5 Year ARM might work. If they planned on staying on the house longer they might consider a 30 Year Loan. I don’t say this any longer. Why? Because of recent developments the 30 Year Loan is king. If you can get a 30 Year loan in the current market 95% of the time it’s the best choice. –Ki Gray

Gray goes on to explain the financial benefits of an old-fashioned, 30-year, fixed rate mortgage. Did you know adjustable rate loans are going up? And fixed-rate loans are coming down? The spread between the two is less than half of what it was two years ago…payment wise.

Of course, I've told you all along a 30-year mortgage is a good deal. You can still pay it off years sooner, say 15 or even 8-10 years! But if you need the money, you're not locked into a more aggressive payoff schedule.

I think one thing the lenders will soon realize, if they haven't thought about it already, is the psychological makeup of people getting 5-year adjustables compared to 15- or 30-year fixed. The "five-year people" are planning to move. They're also trying to get more than they can afford for less than it's worth…or even something they can afford, but they're hoping for a lottery-end-run when they move and sell in five years.

"Fixed-rate-people," we could speculate, are all about settling down in the community into which they are moving. They're planning to pay off their loan, or at least take a conservative approach to money.

I can't tell you whether fixed-rate-people make better neighbors, but I can urge you, what ever kind of mortgage you get, to pay it off sensibly. Get out of all debt, and unless your investments are earning far more than your mortgage is costing you, get out of mortgage debt, too! You can pay your home loan off in as little as one-third the time!