Fixed mortgage, 15 year if possible, otherwise do your darndest to pay it at the 15 year rate. Get rid of PMI ASAP!
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BTW - I place location at pretty above all else, given the property is livable for you and has no glaring deal-breaking faults. You can always add a room or remodel your place down-the-road, but you can't add or remodel the neighborhood!
You're not just buying wood & bricks, you're buying a piece of the neighborhood! I bought concurrent with the old adage, "Buy the cheapest house in the best neighborhood". My lot was worth more than my structure when I bought. And now, even with some improvements later, it's still a close call as to what's worth more - the lot or the structure?
But you know what? Now, many years later when I drive down my street coming home, I still fall in love all over again with the place I live. I've got some great neighbors that live quietly, civilly, respectfully, and take beautiful care of their properties. Even though my place is perfectly fine, when my spouse and I conjecture, "What if we won the lotto?, we both agree we'd knock the place down & rebuild rather than move! How many can say that?
Good luck!
(My advice is free, you get what you pay for!)
