Trying to find the best rate for your mortgage can be a challenge, this is true whether you are purchasing your very first home, or refinancing your existing one. It is important to have some understanding of how mortgages work and the difference in adjustable and fixed rate versions.
The best way to protect your home is by ensuring you receive the best mortgage possible for your situation and understanding the options that are available to you. Do you even know what type of mortgage you have? If not, you may be swimming in dangerous waters.
Some of the basic types of mortgages that you may have include:
· Hybrid Adjustable Rate Mortgages: These have a fixed payment in the first few years and then turn into an adjustable loan. They will be designated by numbers such as 3/27, where the first number designates the number of years the loan is at a fixed rate and the second is the life of the loan.
· ARMs: This is a mortgage that has an adjustable rate when initiated.
· Fixed Rate Mortgages: These have a fixed rate for the entire life of the loan.
Once you have determined what is available and which option suits your needs best you should ensure that you are receiving the best rate for your mortgage. In order to obtain the best rate, use the following tips:
· Knowing your credit rating. A lower rating can raise your mortgage rate by a substantial amount. If your score is low, you can work to increase it prior to applying for a mortgage.
· Determine how much of a mortgage payment you can realistically afford, and make considerations for fluctuating rates.
· Consider opting for a shorter term. When you choose a 15 year mortgage you may be able to also achieve a lower rate on your mortgage, however, this will come with a higher payment.
· Get several different quotes. You can choose to compare mortgage rates through an online comparison, which is beneficial if you are buying or refinancing.
· Review the associated fees, not just the rates. This includes all fees that may be associated with the mortgage, in order to ensure you know the full cost of the mortgage you are acquiring.
When mortgage rates increase it means a higher interest expense, which then results in a higher payment for the same amount of money you borrowed originally. With this type of loan, it can not only make them harder to obtain, but also harder to adjust your budget to accommodate the fluctuating payments that must be made.
Choosing the right mortgage rates Edmonton can be difficult but well worth the time invested.
Author: George Suarez