Compare Mortgage Interest Rates

Mortgage rates are the determining factor in choosing the type of loan. Rates influence the monthly payment that a borrower has to make. The monthly installment of the mortgage is directly proportional to the term of the loan. For a thirty-year term, the monthly repayment amounts will be less when compared to a ten-year term.

Mortgage rates depend on the preferred term. Borrowers can choose fifteen, twenty, or thirty year mortgage terms. In some cases, the term can be extended up to fifty years. A fifteen-year term is the minimum that borrowers can opt for. The current real estate and loan markets also affect mortgage rates. The type of property being mortgaged, number of occupants, and location of the property further determine the mortgage rates. There are two types of mortgage rate options, namely fixed mortgage rates and adjustable mortgage rates.

Fixed mortgage rates are mainly preferred because they offer long-term stability. Fixed rates are the best option for borrowers who want the security of a permanent rate. Adjustable mortgage rates are a way to allow borrowers to go for a higher mortgage amount. If borrowers anticipate that the overall income of the household will rise in the future, then this is a good option to follow. Further, if homebuyers believe that the property bought will be sold in the next five years or so, adjustable mortgage rates are an ideal choice.

For the purchase of a new home, borrowers can approach mortgage lenders as well as brokers. To get multiple quotes from different lenders is advisable before borrowers complete and submit the mortgage application for approval. Mortgage brokers can automatically provide multiple quotes as they represent many lenders. Therefore, with a mortgage broker, borrowers can compare various mortgage options and select the one with the lowest mortgage rate.