subject: Mortgages: Get The Lowest Interest Rate! [print this page] Mortgages: Get The Lowest Interest Rate! Mortgages: Get The Lowest Interest Rate!
To find the best deal on a mortgage loan, you must find one with the lowest interest rate overall. However, finding a mortgage loan with the lowest interest rate starting out is not necessarily the one with the best deal. You want to look at what the interest rate will be overall the entire course of the term. If you have an adjustable interest rate, you must factor in the risks involved. Since the risks are unknown, you will want to factor in the worst case scenario to determine if that is a risk you are willing to take since an adjustable mortgage rate can constantly change.
Many times, adjustable interest rates will have caps on them so you will know the highest interest rate it will ever reach. If this cap is not high, and you start off with a very low interest rate that is fixed for several years, it may be worth looking into getting the adjustable interest rate since chances are, your adjustable interest rate will never stay at the capped interest rate forever. However, most of the time, a fixed interest rate that starts out on a low interest rate will be your safest bet for always having a good interest rate and therefore, saving the most in interest because you will not be at risk for paying a high interest rate. If the interest rate drops a lot further from when you purchased your mortgage loan with a fixed interest rate, you can always refinance to try and get that lower rate.
Of course, the term of the loan will also greatly affect how much interest you pay. The longer the term, the more interest you will end up paying. The shorter the term, although your payments will be higher, the less interest you will be paying since you will mostly be paying off the principle.
