Best 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.
The first thing you should know when selecting a mortgage, is that it's very important to select the right mortgage for your situation. Everything depends on what your goals are in the long term, not in the short term. Going with the lowest rates might make you happy today, but you might be forced to take out another mortgage a few years down the road, because your current one has failed to make you debt free. That's why it's important to make an honest comparison between types of mortgages, not just rates.
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 opposite of an adjustable rate mortgage is a fixed rate mortgage. With this type of mortgage, you know what the interest rate is, because you pay the same amount each and every month. You'll never be surprised by a big riser in your mortgage payments and therefore this is a very safe choice. On the other hand, it's a very rigid choice and you can not easily change it to profit form certain interest rate dips. Most fixed rate mortgages are paid off over 30 years. Sometimes, there is an insurance policy or investment plan connected to the mortgage that makes sure you can make the balloon payment on the end of the mortgage period.
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.
The first thing you should know when selecting a mortgage, is that it's very important to select the right mortgage for your situation. Everything depends on what your goals are in the long term, not in the short term. Going with the lowest rates might make you happy today, but you might be forced to take out another mortgage a few years down the road, because your current one has failed to make you debt free. That's why it's important to make an honest comparison between types of mortgages, not just rates.
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 opposite of an adjustable rate mortgage is a fixed rate mortgage. With this type of mortgage, you know what the interest rate is, because you pay the same amount each and every month. You'll never be surprised by a big riser in your mortgage payments and therefore this is a very safe choice. On the other hand, it's a very rigid choice and you can not easily change it to profit form certain interest rate dips. Most fixed rate mortgages are paid off over 30 years. Sometimes, there is an insurance policy or investment plan connected to the mortgage that makes sure you can make the balloon payment on the end of the mortgage period.
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 vormen market. Mijnadviseur strives to make refinancing or spaarhypotheek oversluiten easier for consumers.
posted by Debt Consolidation Loan at
1:02 PM
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