MORTGAGE RATE INFORMATION
30-year fixed rate This mortgage is an industry standard, as total payments are spread over so many years that your monthly payments are lower than they would be on a shorter term loan. The interest rate, which is set, or locked in, at the time of obtaining the mortgage, remains the same throughout the life of the loan. 15-year fixed rate With a 15-year mortgage you could get an interest rate that is typically one-quarter to one-half percent lower than a 30-year mortgage. The shorter the term, generally the lower the interest. Yet, the main advantage is the fortune in interest you will be saving during the life of the loan. Example
But there are other factors to consider: Take the example above: With the 15-year loan, the monthly mortgage payment is $313 more than the 30-year mortgage. You may want to put that money toward another investment. For instance, in a bull-market economy, you can make more money investing that $313 monthly in mutual funds or other investment securities. Keep in mind that there are ways to prepay your mortgage and whittle away at the principal each month, so that the loan is paid off sooner than 30 years. Also, it depends on how long you plan to own the home you are purchasing. If it's less than five years, you may be better off with an adjustable-rate mortgage, or ARM.
1-year Adjustable-Rate Mortgage Adjustable-rate mortgages, known as ARMs, differ from fixed-rate mortgages in that the interest rate moves up or down. ARMs are tied to a number of indexes, which usually are published interest rates. The margin is the amount a lender adds to the index , usually two percentage points or four percentage points, to set the actual interest rate of the ARM. If you plan to be in the house for less than five years, it may be worth paying the lower interest rate on an ARM vs. a fixed-rate mortgage. Jumbo 30-year Fixed Mortgage 30-year FHA Mortgage You should check with your bank or financial institution about the
requirements for any low down payment loans or first-time buyer programs they
may offer. |
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