How to Compare Mortgage
There are numerous types of mortgages and mortgage lenders available in the market today, creating the need to compare mortgages. When buying a home, most people focus solely on the interest rate. However, there are more factors to consider other than the interest rate. While shopping for a mortgage, you will note different lenders have significant price differences. Therefore, you need to compare mortgages to look out for yourself and ensure you get the best offer. What to Compare Some of the comparison factors you should consider are; 1. The type of monthly payments You need to decide which type of monthly payment would suit you best. For example, would you like a variable or a fixed-rate mortgage? A variable mortgage implies the amount you pay for the mortgage every month can change depending on the prevailing interest rate. Thus, you can either pay less or more than the previous month. In contrast, a fixed rate means you will be obliged to pay a predetermined amount each month until you finish paying off your mortgage. Usually, fixed mortgages are paid off for less than five years. 2. The fixed term Most mortgage lenders offer an introductory rate over a certain number of years. On the lapse of these years, they charge the standard variable interest rate, which tends to be higher. Therefore, if you need to remortgage after some years, you will incur an early repayment charge, which will be pretty costly. The best term for you depends on your needs. For example, if you plan to move in a few years, choosing an extended fixed-term mortgage may not be ideal. Although short fixed-term mortgages may be slightly costly, you save more by not dealing with excessive early repayment charges in the long run. 3. Flexibility to remortgage Re-mortgaging your current choice for a better one in the future can save you lots of money. However, mortgage lenders charge an exit fee which you will pay as you remortgage.