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Choosing Home Mortgages
Choosing the right home mortgage can be challenging and an important decision. Since home buying is a major investment and a long-term debt, you want to secure the best mortgage loan possible. Keep in mind that just because there are many different mortgage companies vying for your business, not all mortgage companies and lending institutions are alike.

As you start the process of looking for a great home mortgage, some things need to be taken into consideration. Since there are many different types of mortgages, making the decision can be daunting. Take time and do not rush yourself through this process. You would do far better by shopping around and doing some serious comparison-shopping then just going with the first loan that sounds good. Being flexible and looking at all of the options could save you thousands of dollars better spent elsewhere.

The important thing when choosing a home mortgage is that each will have different elements for you to consider. Weigh each consideration out carefully and ask yourself some of the following questions:

Do you plan to live in your home for many years or are you just looking for a home on a shorter basis of five to seven years? If you plan to be there a while, then a Fixed Rate Mortgage would be best. On the other hand, for a shorter term, an Adjustable Rate Mortgage would be the better decision.

Are you willing to take any risk? By that, do you need to know how much your monthly payment will be each month for budgeting or are you willing to work with market fluctuations? A Fixed Rate Mortgage will set your monthly payment but you generally will pay a higher interest rate. An Adjustable Rate Mortgage will vary within a set percentage of the current market but give you a lower interest rate.

Do you expect your income to remain much the same or are you in a position or career with tremendous advancement opportunity? If you believe your income will increase over the next few years, you should consider a graduated payment mortgage.

How much money do you have to put down on the home as your down payment? The more money you can put down the better, and you should think about securing a 15 or 20-year loan over a 30-year loan. The end savings is astounding.

Other factors that are of importance would include:
  • Annual Percentage Rate, or APR
  • Closing Costs
  • Interest Rate
  • Lender Reputation
  • Loan Approval
  • Points and Fees
 
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