Choosing A Mortgage

In addition to these two traditional mortgages, there are dozens of other mortgage products available. There are also several important factors to consider when selecting a mortgage best suited for you.

Some of these factors when choosing your mortgage include:

• How much can you afford to pay each month based on your current income.
• Do you expect your income to rise, fall or stay the same over time.
• Do you plan to stay in the house long-term or move in a few years.
• What is your tolerance for risk.
• Do you expect interest rates to rise, fall or stay about the same.

Which is more important,
your mortgage or your house?

Ever stop to think about it? When you consider that you are probably going to live with your mortgage for as long as you live in your new home, it becomes important to understand what it means to take on a mortgage. Finding the best mortgage product at the best rate can make a big difference in your life.

What is a Mortgage?

A mortgage is a method of using your real estate as security for the payment of a loan you establish with a lender. This can apply to a new home you are buying now, or to property you already own. A mortgage essentially lets individuals and businesses purchase residential or commercial real estate without having to pay the full value at the time of purchase.

Home buyers can choose from many different types of mortgages. The two most common types of mortgages are a fixed rate mortgage (FRM) and an adjustable rate mortgage (ARM).

Fixed Rate Mortgage

A fixed rate mortgage has an associated interest rate and monthly payments that remain constant for the life (or term) of the loan. In the United States, the term is typically for 10, 15, 20, or 30 years. With a fixed rate mortgage, your monthly payments would only increase due to increases in property taxes or insurance rates. Basically, this is a smart option if you want your mortgage payments for principal and interest to be constant throughout the life of the loan.

Adjustable Rate Mortgage

An adjustable rate mortgage has a fixed interest rate for an initial period of time but changes to an interest rate dependent on a market index (in U.S. this is most likely the Prime Rate). An adjustable rate mortgage's interest rate changes periodically (typically monthly or annually) and can adjust up or down, potentially saving you money in interest. Because interest rates can be unpredictable, making a fixed rate mortgage difficult to obtain, adjustable rate mortgages are another option and are widely used.

LendingTree can assist you with more information pertaining to the best mortgage for you through our FREE Guide to Adjustable Rate Mortgages or Guide to Mortgages. Simply request a mortgage through LendingTree to obtain this valuable guide.

In addition, we offer a real difference in your pursuit of the perfect mortgage. Through one simple online form, not only do lenders compete for you, but you can receive up to 4 real offers in just minutes.

So, if you are considering a mortgage . . . consider LendingTree, the company with 95% customer satisfaction.

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