Which Best Mortgage Rate Offer Is For You?

2007-03-08 10:33:40

( Financial )



Buying a house is not a simple matter. It is one of the most important investments you may buy in your lifetime. Choosing the best mortgage rate is also as important as this would determine the stability of your financial future in the following years. The lowest mortgage rate is not necessarily the best loan rates for you.

There are two types of mortgage you can take out. One has the adjustable interest rate, the other a fixed interest rate. The adjustable option is just that – the rates change as the markets change. The adjustment can happen every year or every month. Fixed rate mortgages offer fixed interest rates. It can be more expensive than adjustable rate mortgages, but you can be assured that your payments will not drastically increase if something happens with the markets.

To secure the best mortgage rate, you have to evaluate your current financial situation. Ask yourself if you are planning to live in your house for a long time. If you are newlyweds, chances are the answer is no. You may live in the house for a couple of years but will move to a newer house once you have a family. The same goes if you are single.
Securing a mortgage with an adjustable rate can mean lower monthly payments. You can also take advantage when the interest rates fall without refinancing your loan. You can even save more money and divert it to another type of investment. Before going with an adjustable rate mortgage, you may want to ask yourself first if you can still afford the monthly payments if the interest rates go up significantly in the future.

For some people, the lowest mortgage rate may not always mean the best mortgage rate. If you prefer not to worry about the market rates, this may be for you. You have one fixed rate regardless of the performance of the market. You can easily budget your expenses and the terms are easier to understand than the adjustable rate option.


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