Bascially, there are two type of mortgage : fixed rate and ARM (adjustable rate mortgage).
My recommendation is always 5/1 ARM, which means that the initial interest rate applies for initial 5 years, after which the interest rate is adjusted once per year. As we said earlier, you will never use the adjusted rate. During the 5th year, you simply re-finance (use no-point no-fee refinance).
The exception is your rental property. If you can lock into a good 15-year or 30-year interest rate (remember, it has to be low) before you move from your first house to your second house, you should lock into that low rate. It is much harder to re-finance rental property with a good rate.
The bigger question is, on top of your monthly mortgage payment, how much additional payment you should make into your principle ? Remember the NPV and BAO we discussed in Chapter 1. Assume your mortgage interest rate is 3.5% and you can make 7% return on your stock investment. In principle you should make zero additional payment on top of monthly mortgage, because you are making extra 7% - 3.5% by simply borrowing money from bank. The exception is that you may want to consider diversify your investment profolio. I would recommend that you make one extra payment per year. This way, you can save 5~6 years' off your 30 year duration of mortgage (do the math by yourself).
Beyond your own company, the mortgage is your biggest vehicle to use other people's money to make money for yourself. Spend some time to do the homework, so you can make the decision wisely.
