How to Choose the Right Mortgage for Your Needs

Finding a mortgage could be like finding a needle in a haystack. Everything looks so confusing and none of it is easy to understand. There are a few things that you can do to make this an easier process. Just take into consideration these few things and you will be on your way to a great mortgage that fits you perfectly.

What Kind of Mortgage?

The first thing you should look at is, what type of mortgage do you need? You can get a mortgage to buy a new home, refinance a new home, to move a house or even to buy rental houses. The type of mortgage you need will decide many of the other things in your mortgage contract. Halifax is a good provider to try out first. They have an online mortgage calculator that can help you find exactly what you need.

What Type of Interest Rate you Want?

The interest rate is figured in two separate ways. You can either choose to have a fixed rate mortgage or variable rate mortgage. There are good and bad sides to both.

Fixed Rate Mortgage is good because you will know what your interest rate is at all times. So if the average interest rate is going up, yours will not. It stays the same throughout the mortgage. On the other hand if the national interest rate goes down, yours will not. You may find yourself paying a higher interest rate than many other home owners.

Variable Rate Mortgage means the interest rate you pay will fluctuate. So if the national interest rate average changes, or your bank/mortgage company raises/reduces their rates, your interest rate will change. On one hand this may be good if the national average goes down, but then again if the national interest rate rises so will your payments.

Your mortgage adviser can tell you what the national average for interest rates are at the current time, they can also tell you what their interest rate is also. Halifax is a good provider when looking for information. Their mortgage specialist will answer all your questions. This will give you more insight on deciding which rate is better for you.

How Long of a Contract?

This is where you will see the most difference in your mortgage. The longer it takes you to pay a mortgage off, the more money you will pay out. That is because interest is added the longer it takes you to pay. Paying off a mortgage in a short period is often the most workable idea. But if you want to keep your mortgage payments lower, then you can go for the longer terms.

Which ever type of mortgage you choose, make sure it fits your needs. Do not let pushy brokers talk you into something you can not afford to do. Always read the fine print and ask any type of question that you need to. Having a mortgage is one of the most expensive things you will do in life, so study all your options.

Related posts: