What is the best mortgage rate for my needs?
A mortgage rate, when you purchase a home is determined by both economic conditions, and the type of loan program that you choose. The first thing when you look for a mortgage is to determine how long you intend to own the property. A variable rate mortgage will usually have a lower mortgage rate than a fixed rate mortgage and will save you money while you own the property, by giving you lower monthly mortgage payments.
What are the benefits of getting a better mortgage rate?
There are several benefits to having a better mortgage rate. The most obvious benefit is that a lower mortgage rate will result in a lower mortgage payment. Another benefit is that you can handle a higher loan amount than you could at a higher rate.
In fact, if you can handle a higher mortgage payment, the rate on a 15 year fixed rate mortgage is normally lower than the rate on a 30 year fixed rate mortgage, and you could save thousands of dollars in interest over the life of the loan.
Read the fine print when looking for a mortgage rate
Always read the fine print when considering a mortgage rate, for either a purchase or a refinance. There are loan programs such as option ARMs that advertise a very low teaser mortgage interest rates up front, but over time may wind up charging you a higher mortgage rate than you might have received with a different type of loan.
Please refer to the U.S. Federal Reserve’s and MBAA’s (Mortgage Bankers Association of America) websites for recent forecasts on the housing industry.
