| Buying a house is one of the biggest decisions that | | | | years go by, you are actually paying quicker into the |
| one can face financially today. | | | | equity of your home. |
| Unless you have a lot of money saved, you will need | | | | This can help if you want to borrow against the house |
| to obtain a mortgage. This means that you will quite | | | | to do renovations, take a vacation or put a child |
| possibly be tied to your house for a long time to come | | | | through college. |
| or until you resell. | | | | The Adjustable Rate Mortgage starts off at a lower |
| There are many things to consider when buying a | | | | rate of interest for a specified amount of time but then |
| house and obtaining a mortgage. | | | | it can be increased by the lender. It usually has a cap |
| How is your credit rating? | | | | so although they can keep increasing it, they are limited |
| What type of mortgage do you want? | | | | by the cap. |
| How much money do you have to put down? | | | | This can turn out to be very financially draining and you |
| Obviously, the better your credit rating, the better | | | | only get a certain amount of warning so your |
| chances that you will have of getting a mortgage and | | | | mortgage payment can change from one month to |
| getting a much lower interest rate. | | | | the next. |
| Even if your credit is not so good, don't give up hope | | | | The good thing about this mortgage is that if you are |
| as there are mortgage lenders who are willing to lend | | | | only intending to stay in the house for a few years you |
| to you, at a higher interest rate of course. | | | | will have the cheaper interest rate for the specified |
| There are two main types of mortgages, the fixed | | | | amount of time. |
| rate and the adjustable rate. | | | | Basically the type of mortgage that will suit you best |
| The Fixed Rate Mortgage is as it says, the rate of | | | | either the Fixed or the Adjustable Rate will depend on |
| interest is agreed upon for a term of years, usually 15 | | | | the length of time that you think that you will be staying |
| or 30 and it doesn't change. | | | | in the house. |
| This can work to your advantage in a couple of ways. | | | | If you only intend to stay for 1 to 5 years, you may |
| You know how much you are going to be paying for | | | | want to consider the Adjustable if you can get a good |
| the life of the mortgage so you can budget more | | | | rate that will not be adjusted for a number of years. |
| effectively without being surprised by an increase in | | | | If you intend to stay longer than 5 years, you may |
| your interest rate. | | | | want to go with the Fixed Rate Mortgage that will |
| The other way is that although your mortgage interest | | | | always stay the same although may be a fraction |
| rate may start off a little higher, you will find as the | | | | higher. |