Let’s talk mortgages. Did you know that when you apply for a loan to buy a home, you can shop around to more than one lender? In fact, shopping around for your mortgage can actually help you get a better interest rate and save money. For a typical $250,000 mortgage, a borrower who got one extra rate quote saved an average of $1,435 over the life of the loan, according to Freddie Mac. Borrowers who got five rate quotes saved $2,914 – on average!
Every bank and lender will be able to offer you a different loan program and it might take a few before you find the right one. Before you start shopping, know the difference between the two primary mortgage types: fixed-rate and adjustable-rate.
A fixed-rate mortgage charges a set rate of interest throughout the duration of the loan. Although the amount of principal and interest might from payment to payment, the total payment remains the same, which makes it easier to predict and budget for monthly expenses.
An adjustable-rate mortgage carries an initial interest rate set below the market rate on a comparable fixed-rate loan, but then the rate rises as time goes on. Depending on how long the ARM is held, the interest rate will typically surpass the going rate for fixed-rate loans.
If you have questions about what type of loan is right for you, give us a call! Chris 480-754-9077 & Cheryl 480-754-9477