Easy ways To Get The Lowest Mortgage Rates
The choice for a certain lender is usually based on the lowest mortgage rates quoted. When there are so many forms of mortgages and so many options to choose from, it's tempting to just ignore all the well meant advice and choose the lowest rate. But the lowest mortgage rates might not be the best option in your current situation. Choosing the wrong type of mortgage might mean trouble somewhere down the line.
When selecting a mortgage, keep in mind that it's extremely important to choose a mortgage that's suited to your needs and goals. The lowest rates might look very good today, but won't look as good when you are forced to take out a loan or another mortgage in a couple of years because your 'lowest rate mortgage' failed to make you debt free. Always make an honest comparison between different types of mortgages, to ensure you really do get the best deal available.
Every mortgage has upsides and downsides. An adjustable rate mortgage, or ARM, is a very popular mortgage form. Especially when interest rates are low, ARM's give you the possibility to profit the most from the interest situation. The downside of ARM's is that you might be looking at higher monthly payments from one month to the next, because mortgage rates are adjustable.
The fixed rate mortgage form is almost the opposite of an adjustable rate mortgage. With a fixed rate, you know each month what your monthly payment is going to be, because you have a fixed mortgage rate. Usually, fixed rate mortgages must be paid off within thirty years. Sometimes, balloon payments have to be made at the end of the mortgage. You can choose to save for these payments, or invest every month in an insurance policy or investment plan to make sure you can afford the balloon payment after 30 years. The downside of fixed rate is the rigidity of this form. It's not easy to change your mortgage form if you want to profit from low interest rates.
Getting the lowest rate is a good goal, but make sure you get the right kind of mortgage for your situation. If you don't do your research, or search expert advice, you might be looking at trouble down the road.
When selecting a mortgage, keep in mind that it's extremely important to choose a mortgage that's suited to your needs and goals. The lowest rates might look very good today, but won't look as good when you are forced to take out a loan or another mortgage in a couple of years because your 'lowest rate mortgage' failed to make you debt free. Always make an honest comparison between different types of mortgages, to ensure you really do get the best deal available.
Every mortgage has upsides and downsides. An adjustable rate mortgage, or ARM, is a very popular mortgage form. Especially when interest rates are low, ARM's give you the possibility to profit the most from the interest situation. The downside of ARM's is that you might be looking at higher monthly payments from one month to the next, because mortgage rates are adjustable.
The fixed rate mortgage form is almost the opposite of an adjustable rate mortgage. With a fixed rate, you know each month what your monthly payment is going to be, because you have a fixed mortgage rate. Usually, fixed rate mortgages must be paid off within thirty years. Sometimes, balloon payments have to be made at the end of the mortgage. You can choose to save for these payments, or invest every month in an insurance policy or investment plan to make sure you can afford the balloon payment after 30 years. The downside of fixed rate is the rigidity of this form. It's not easy to change your mortgage form if you want to profit from low interest rates.
Getting the lowest rate is a good goal, but make sure you get the right kind of mortgage for your situation. If you don't do your research, or search expert advice, you might be looking at trouble down the road.
About the Author:
Mijnadviseur is specialised in giving mortgage advice, specifically geared towards the Dutch hypotheek tarief market. Mijnadviseur strives to make refinancing or oversluiten hypotheek easier for consumers.
posted by Credit Counseling at
5:14 AM
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