Buying a home is a huge investment. Finding the right mortgage for your home is confusing and very frustrating. However, through mortgage comparison, you can get the best deal. During this time, you are supposed to speak to different mortgage lenders to assess each possible option. Here are is a checklist to help you with mortgage comparison.
What’s Better Adjustable Or Fixed Rate?
With a fixed mortgage rate, you are locked into a fixed interest rate which you will pay consistently until the loan is cleared. However, the taxes, insurance and other costs on your mortgage might increase or decrease accordingly. On the other hand, the adjustable rate can either go up or down until the loan is cleared. Most mortgage rates with adjustable interests usually start with a period of 10, 7 or 5 years as an introductory period.
During this period the rate is fixed but after that period, they can change depending on various factors such as the prime rate. Most people prefer adjustable rates because the introductory period offers lower interests. However, you should assess whether you are comfortable with your payments increasing in the future before choosing either of the two.
Expected Closing Costs
These are usually about 3% of the buying price of your house. They are usually paid when the purchase of your house is finalized. They include fees charged by lenders, appraisal costs, processing charges, insurance fees and much more. Once you have received an estimate on your house, list down the fees you can shop for in order to reduce your closing costs substantially.
Before choosing any mortgage, check out if you are eligible for any special programs that can reduce the overall cost of your house. For instance, you or your partner served in the military, you can qualify for a veteran loan which has low or no down payment. Even better, if you fail to pay a few mortgage payments, there are protections in place with this type of loan.
In conclusion, getting a mortgage is a very important decision that has a huge impact on your financial freedom. Therefore, comparing offers from different lenders will allow you to make the best decision.
One of the best ways to compare mortgages is to use a mortgage broker. Their service is free to you and they have software that can electronically compare loans from up to 30 lenders: