What type of house is these?

I am buying a new house and after that, I'm going to sell my old house and put the money as a down payment for my new one. A few years later, I want to pay off all of the mortgage on the new house. What type of mortgage should I get?

• Answer:

  You want a fixed rate loan with no penalty for early payment. Since you are buying the new house before selling the old one, there are a couple of additional options you want to make sure you have. 1) Option to re-amortize the loan - without fees. This allows you to lower your payment after applying a lump sum, without refinancing. For example, say your new mortgage is 100K, and your payment is 700/month. You put 50K down on the mortgage. Re-amortizing the loan would let you lower your payment to 350/month following the same payoff schedule, since half of the original loan is paid. 2) Option to remove PMI. Make sure the lender will drop the PMI mortgage insurance after you owe less than 80% of the value of the house. Some lenders require you to get a new appraisal, or to keep the insurance for a minimum of 5 years even if you have already have more than 20% in equity.