How To Find The Right Mortgage

How To Find The Right Mortgage



How to​ Find the​ Right Mortgage
A mortgage that is​ properly suited to​ an​ individual’s needs when buying a​ home can save the​ individual thousands while a​ mortgage that has not been properly tailored to​ their needs can place the​ house and the​ individual’s financial future in​ jeopardy .​
And because there are so many types of​ mortgages and mortgage products available,​ it’s essential to​ have a​ basic understanding of​ mortgages before choosing which one is​ the​ right one.
First one needs to​ understand the​ different options available to​ them .​
For people who have good credit,​ a​ fixed rate mortgage is​ usually the​ best option .​
These types of​ mortgages offer the​ same interest rate for the​ entire life of​ the​ loan so the​ monthly payments will always be the​ same .​
One may also choose an​ adjustable rate mortgage (ARM) after a​ one,​ five,​ or​ ten year term .​
These mortgages have a​ fixed rate for a​ certain period and they then move to​ a​ variable rate after the​ one,​ five,​ or​ ten years .​
This means that the​ monthly payments could be more or​ less,​ depending on​ what the​ interest rate currently is​ .​
Rates don’t generally have dramatic increases or​ reductions so there are usually no large surprises .​
However,​ over the​ course of​ a​ thirty-year loan,​ the​ interest rate could be considerably more or​ less by the​ end of​ the​ mortgage.
Individuals who have no or​ bad credit will have a​ higher interest rate on​ their mortgage .​
They may also have to​ look into the​ sub-prime lending market where the​ loans will have much higher interest rates and many different structures .​
When looking at​ the​ different loan options available,​ it’s important to​ make sure there is​ no prepayment penalty,​ which have a​ fee associated with paying off more of​ the​ mortgage in​ advance .​
These loans should be avoided as​ the​ goal is​ to​ pay off the​ debt.
A mortgage consists of​ two major components: the​ down payment and the​ interest rate .​
For people who are very active in​ investing in​ different things such as​ the​ stock market,​ and real estate,​ it’s best to​ pay as​ little down payment as​ possible .​
If the​ individual has a​ good credit rating,​ it’s best to​ try to​ get a​ 100% mortgage .​
The interest on​ these mortgages is​ generally higher but the​ cost of​ borrowing will be less than the​ returns the​ individuals will receive on​ their investment.
For individuals that are not active investors,​ the​ mortgage can be a​ great investment tool .​
Paying off a​ mortgage with a​ 6.5% to​ 7.5% interest rate makes more sense than savings accounts that offer a​ 2.5% interest rate .​
Everything in​ the​ mortgage process is​ negotiable .​
The goal is​ to​ lower the​ down payment and the​ interest rate .​
The higher the​ down payment is,​ the​ lower the​ interest rate will be and the​ sooner one will be able to​ pay off the​ mortgage .​
Using a​ mortgage broker can help one find the​ best mortgage for the​ specific situation.




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