Interest rates aren’t everything when talking about mortgage loans. Yes, they are important, but they’re pretty small compared to all other remaining factors. In fact, many homeowners end up trapped in serious predicaments after forgetting to examine all options. The key to finding the best mortgage loan is to be aware of all possible setbacks and what is right or wrong for you.
A Few Problems to Avoid When Considering a Mortgage Loan
Less is Not Always More
So, you think you want lower interest rates because it seems to promise smaller expenses in relation to the home loan? Let’s say you have a lower interest loan and agree to pay it over a 30-year period. This will still equal tens of thousands of dollars in interest!
For the first 15 years or so, most of your mortgage payment will be interest and not principal. Even if you plan to pay more each month to shorten the life of the loan, most home loans with low interest rates and long durations impose penalty fees for early paying off.
A loan with higher interest can be a sweeter deal for you, especially if it allows more freedom in terms of payoff and negotiating power.
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