When choosing the right loan program, it is important to look at the bigger picture surrounding your finances. Many consumers tend to fixate on the 30 year fixed programs because they have not been properly exposed to the numerous loan programs that are currently availible to them. Factors such as length of time you plan on being in your home, your current credit situation, current debt, and income will play a large role in selecting a tailor made loan program to suit your needs.

Choosing the right loan program is just as important as the interest rate associated with a loan. The loan program that is right for you may not be right for someone else. Each borrowers situation is different depending on many factors. These factors need to be looked at in their present state as well as with an eye toward the future. There are many programs available through mortgage brokers that a borrower may qualify but choosing the right loan for your situation is important to your lifestyle and financial well-being.

Not knowing the industry, most people will lean toward choosing a 30 year fixed rate program. But if you only intend to live in the property for 3 to 5 year before moving up or refinancing the loan you can save thousands by choosing an arm or Hybrid loan program.

When choosing your loan program , your first consideration should be how long you plan to stay in the home . The second is if you plan to pay off the mortgage, how quickly you want to pay it off . Other considerations may include job stablity, cash flow, and future goals.

If you want to move into a home with a price slightly above what you can afford now, and you expect your income to increase in the next few years, a mortgage with an "Interest Only" feature may be what you need. With an "Interest Only" mortgage, the borrower makes monthly payments for the accrued interest, none for paying down the principal. Therefore, the monthly payments are lower than that of a fully amortized mortgage. The "Interest-Only" loan allows a home buyer to purchase the house he otherwise cannot afford.  In many cases you still benefit from the appreciation of your home.

Appreciation - The term appreciation  refers to an increase in the value of a property.

Let's look at some numbers to put this in perspective and show you why appreciation makes real estate such a good investment. Take a 200K home bought for full value with an appreciation rate of just 5% per year.

Year 1 - 200,000
Year 2 - 210,000
Year 3 - 220,500
Year 4 - 231,525
Year 5 - 243,101

Now is it starting to sink in why appreciation is a key factor in Real Estate?

You may realize appreciation on a property due to a positive improvement in the property, the area, or the removal of another negative factor.

Appreciation is the increase in value of your home. This is one of the many benefits of home ownership. Many homes have seen double digit appreciation in the last several years.

Commonly, and incorrectly, used to decribe an increase in value due to inflation.

One major misconception that many homeowners/consumers have is that appreciation represents some type of monetary performance of the equity in their home. Appreciation takes place whether a homeowner has 0 equity or $200,000 in equity. The appreciation is obtained from increased market value of the property. The equity, when trapped in the home is "lazy" - meaning it is not a performing asset.

Many of the savviest real estate investors know that the key to building their fortunes by using the equity in their homes as the foundation is to separate the equity from the home at a good valuation, and use this substantial liquidity, which is often borrowed at a fraction of the market rate of return in alternative asset classes, to invest in equities, commercial real estate, and most profitably in their own small businesses, yielding a substantially higher return than the nominal interest rate on the money they've cashed out of the home. This is a trick copied from big business and can be the cornerstone of a powerful wealthbuilding strategy for homeowners who aspire to financial freedom.

The rate of appreciation differs depending on the area some areas appreciate faster than others but given time your home will go up in value.

If you feel that your home has appreciated a good amount, you should consider refinancing your current mortgage to get money out, or to get more favorable mortgage terms.