Friday, May 21, 2010

Save Money With the Lowest Home Mortgage

The lowest home mortgage you can find will often have the lowest interest rate. Because home mortgage lenders charge interest based on your credit, the lowest home mortgage for one person may not be the same as the lowest rate you can get. Being diligent about the total cost of the mortgage and the monthly payment for it can help you save thousands of dollars over the course of your mortgage.

If you look at a home mortgage calculator, you can see the benefit of getting the lowest home mortgage possible. Just reducing the interest by 1 percent on a home costing $114,000 can save you over $70 a month. While that might not seem like much, you'll save over $25,000 if you pay the loan as scheduled over the course of 30 years. That can pay for a year of college for your child, or you could buy a new car.

In addition to finding the lowest interest rate for your home mortgage, there are other factors to consider. The closing cost for your loan will vary by company. Some lenders charge additional fees for each service, increasing the cost of the loan. The interest rate can also vary based on the type of loan you get and the term for it. For examples, the starting interest rates for an adjustable rate mortgage (ARM) and a 15-year home mortgage are typically less than the lowest interest rate for a 30-year fixed loan. When you compare these options, you'll want to evaluate the monthly payment and the total cost. With an ARM, take fluctuation in interest into account. If you can't pay afford the monthly payment at the highest interest rate possible for the ARM, the lowest home mortgage for you may well be a fixed loan.

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