How to Find the Best Home Mortgage Rates

How to find the best home mortgage rates on a loan is a matter of plugging in all the factors of each loan into a mortgage calculator to see if you can afford it. Annual percentage interest rates and monthly payments are hardly enough information to see if a home mortgage is affordable.

For example, even the simplest loans can have the following factors to consider:

– Annual percentage interest rate (APR)

– Total principal loan amount

– Length of loan in months

– Annual insurance costs

– Annual taxes

– Prepayments monthly or annually (if any)

– Extra payments monthly (if any)

– Interest only payments (if any)

– Adjustable rate mortgage (ARM) interest rate changes (if any)

– Fixed rate period in months (ARMs only)

– Rate adjustment period in months (ARMs only)

– Starting interest rate (ARMs only)

– Expected adjustment percentage (ARMs only)

– Interest rate cap percentage (ARMs only)

You will need all of the above factors before you can calculate what your monthly mortgage payment is going to be. Rates on interest will usually be higher on longer term loans due to the increased risk to the lender. Often the insurance and taxes are not taken into consideration when computing home mortgage rates yet can have a profound effect on the final monthly payment calculation. Since APR is an annual percentage rate it almost goes without saying that the total interest paid for a 30 year mortgage is going to be twice that of a 15 year mortgage even if the interest rate is the same.

To calculate all these factors you really should use a mortgage calculator. There are several really good free ones on the Internet. To find them you can just enter “mortgage calculator” without the quotes into your favorite search engine. It is recommended to get several loan quotes from several lenders and compare them using the online calculator so that you get a better idea on how much you are going to have to pay both monthly and in total.

With the current state of the economy it is likely that rates are going to stay low for awhile. Of course, they will not stay low forever so if you want to buy a home then now would be a great time. Use your favorite mortgage calculator and see if you can swing the monthly payments using different loan factor scenarios.

Some people bought their home when the interest rate on home mortgages was much higher. These people may want to consider getting a mortgage refinance loan to take advantage of the low rates of today. Once again it is advisable to use an online calculator to compute the monthly payment based on each lender’s home mortgage rates. When refinancing always make sure to check to see if your mortgage has a refinancing or early payoff penalty. If it does, you will need to factor it in as well.

If you do not want to deal with the complexity of looking for lenders and calculating home mortgage rates, then you can try to hire a mortgage broker to do it for you. Mortgage brokers have a huge network of lenders that they do business with and can easily find many loan possibilities for you. Mortgage brokers may not be free, but their advantage is that they take care of all of the little details for you.

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