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The Best Mortgage Rate For You
Setting out to buy a new house or taking out a new mortgage is an exciting time. Understanding what types of mortgages there are could make a big difference in your monthly payments and the long-term cost of your loan.
There are two primary types of mortgages loans, a fixed-rate mortgage, and an adjustable-rate mortgage. Consider the fees and overall costs of the loan before choosing which one is right for your needs. Some homeowners lock into an adjustable-rate mortgage to acquire a low payment for a few years. However, the interest rates can change, causing a homeowner to have a mortgage payment that is double their "regular" amount.
The most common home loan you can acquire is the fixed-rate mortgage. Whether it is a 15, 20, or 30-year loan, the interest rate of the loan is locked in and will not fluctuate with the markets. Another thing to consider with the fixed-rate mortgage is that your monthly payment can increase based on changes to your insurance and taxes. If you already have a fixed-rate mortgage, you do have the option to refinance your loan at a lower rate. This can save thousands of dollars off the life of your loan and it can help you pay off your home sooner.
The adjustable-rate mortgage is considered a risky investment option. The interest rate is fixed for a specific period of time, and then it will adjust based on the market. This places all of the risk on the borrower instead of on the bank. The initial interest rates are usually pretty appealing, which is why many people utilize them.
To apply for a mortgage loan, you must meet with a bank representative. A mortgage loan officer will require a series of documents to process the loan. Income statements, credit rating, debt ratio, financial stability, and the down payment amount will play a significant part in acquiring a loan. The overall process can take a few days for a bank to provide a pre-approval notice. Once you find a home, the mortgage loan officer will finalize the paperwork process, which can take upwards of sixty days. Paperwork can be delayed in the mortgage underwriting process. There are also several documents that must be submitted by the seller and different procedures must be met before the sale is finalized.
It is vital to compare mortgage rates to find a bank with the lowest rate, fees, and simple application process. At Banktruth.org, we gather information from several banks to provide with you a listing of the best mortgage rates. It is our goal to give you the right information to make your decision-making process easier than ever.