Mortgage Shopping Tips
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When you buy or refinance a home, it’s a good idea to shop around for the best mortgage deal you can find, recommends the Michigan Association of CPAs. When you’re looking for information, remember that the mortgage interest rate will affect your monthly payment amount, so as a general rule you will want to find the lowest interest rate possible. Be sure to ask, however, whether the lender is offering a fixed-rate loan or an adjustable-rate mortgage.
With a fixed rate loan, the interest rate will remain the same as long as you hold the mortgage. With an adjustable-rate loan, the rate can change based on the direction of interest rates in the credit markets. Adjustable-rate mortgages often offer low initial interest rates, but those rates can creep higher in the future. That means your monthly payment will also rise. Find out what kind of loan you’re being offered and, if it’s an ARM, how often the rate can change and by how much. If you select an ARM, CPAs advise that you ensure that you can afford the mortgage not only right now, but also in the future. And remember to consult your local CPA about how your decisions will affect your overall financial picture.
