When Buying, Be Sure to Compare Mortgage Rate Quotes
Now is a good time to buy a home. Sure, the credit restrictions are a little bit tight – but prices are low and so are interest rates. If your credit is good and you have a down payment, you can qualify and own your own home. As the economy stabilizes the interest rates and home prices will begin to rise again, so it’s important that you get your home before that happens. You could get priced out of the market if you don’t act when the prices and rates are good. With that in mind, though, make sure you don’t jump into something you aren’t sure about or that seems wrong to you.
You’ll want to compare mortgage rate quotes before you sign anything. You might be offered a nice, low rate with one company, but there may be a catch. Some of these low mortgage rates are only low for a set period of time. Because they’re adjustable, they can go up in the future. This will raise your payment, sometimes to a point where you can’t even afford to pay it. Rates rarely go down, so if you get an adjustable rate mortgage you have to prepare for a higher payment later. It’s better to compare the rates of fixed rate mortgages, because these won’t change over the life of the loan. The only way they can change is if you refinance your loan, and that won’t happen automatically.
Also find out if the rate you’re being quoted has other catches, such as a prepayment penalty or a balloon payment. Both of these things can be a serious problem for homeowners who aren’t paying close attention to what they’re signing. Prepayment penalties stop them from paying their loan off early, and balloon payments mean a huge payment down the line. It’s better to avoid these.
