Mortgage rates can vary quite a bit between the various types of mortgages available. And while interest is still historically low, how does that translate to the loan?
Generally speaking, if you plan to own the house for an extended period of time, selecting a fixed rate loan is probably going to be your best bet. Your monthly payments stay consistent for the duration of the loan, and the total amounts are likely to be lower than most of your other options.
If trying to choose between the 15 and 30-year durations, you’ll need to ask yourself whether a lower monthly payment is important, or whether it’s more important to save on the interest costs you’ll be paying over the longer time frame.
Also known as ARMs, these loans carry an interest rate that is pegged to the market. So as the market rate floats up or down, so does your interest (and monthly) payment. While rates have been at near-historic lows for an unprecedented amount of time, there is no guarantee they will stay on the bottom end of the spectrum.
People most interested in leveraging adjustable rate mortgages are into single-family residential real estate development. They only plan to carry the loan for a very short period of time, as the rates currently have nowhere to go but up.
In about 90% of cases, a fixed rate mortgage is going to be the best choice for you. However, we are happy to sit down and walk you through all the options. Contact our team of mortgage experts at Midland Mortgage to find out the current mortgage rates and best financing options for your situation.