Choosing a lender based on the lowest mortgage rates quoted might not be the best way to make your mortgage decision. On the Internet it’s possible to get rates quoted from hundreds of different lenders, so it looks easy to make the right choice. But because of the multitude of mortgage options available, it’s important to get mortgage advice that’s based on your individual situation. When selecting a mortgage, keep in mind that it’s extremely important to choose a mortgage that’s suited to your needs and goals. The lowest rates might look very good today, but won’t look as good when you are forced to take out a loan or another mortgage in a couple of years because your ‘lowest rate mortgage’ failed to make you debt free. Always make an honest comparison between different types of mortgages, to ensure you really do get the best deal available. A very popular form of mortgage, when you are looking for the lowest rates, is the ARM mortgage.
ARM stands for Adjustable Rate Mortgage. ARM mortgages are very popular when the interest rates are low, because they give you the biggest advantage in these periods. There are many different types of adjustable rate mortgages, but the important thing to keep in mind is that interest rates fluctuate and you might be looking at a higher monthly payment in a couple years or even months. Another mortgage form is the fixed rate mortgage. This is basically the opposite of an ARM. With a fixed rate, you know exactly what you are going to pay each month, because the interest rate stays the same. Most fixed rate mortgages require you to pay them off in 30 years. Some forms of fixed rate mortgages require you to make balloon payments at the end.
Most of the times, you can make sure you can afford the balloon payment by investing in an insurance policy or investment plan each month. The downside of a fixed rate is the rigidity. You can’t change your mortgage easily when interest rates are down, so in those times you won’t be able to profit from good market conditions. Getting the lowest mortgage rates is a good goal, as long as you make sure you choose the right mortgage for your situation. Get expert advice, do the research, so you avoid getting into trouble somewhere down the road. About the Author: Mijnadviseur is specialised in giving mortgage advice, specifically geared towards the Dutch hypotheek afsluiten market. Mijnadviseur strives to make refinancing or hypotheek oversluiten advies easier for consumers.
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