Debt Consolidation Credit Counseling In Phoenix

Choosing a lender based on the lowest mortgage rates quoted might not be the best way to make your mortgage decision. On the Internet it's possible to get rates quoted from hundreds of different lenders, so it looks easy to make the right choice. But because of the multitude of mortgage options available, it's important to get mortgage advice that's based on your individual situation.

First off, it's important to select the right mortgage for your situation. It all depends on your goals and long term plans. If you go with the lowest rate, you might be happy today, but in a few years you might be forced to take on another mortgage, because your current one has not made you debt free. That's why you need to think about your situation and make sure you do an apples to apples comparison when comparing mortgages. Don't make the mistake if comparing rates, not discriminating between types of mortgages.

Every type of mortgage has it's good points and bad points. For example, an ARM, or adjustable rate mortgage, has been a very popular mortgage form over the years. When interest rates are low, an ARM gives you the possibility to pay very low monthly payments and profit from market conditions. That's the upside. The downside of ARM's is that you never know what next month's mortgage payment is going to look like. Some months will be higher, some will be lower, because mortgage rates are adjustable.

The fixed rate mortgage form is almost the opposite of an adjustable rate mortgage. With a fixed rate, you know each month what your monthly payment is going to be, because you have a fixed mortgage rate. Usually, fixed rate mortgages must be paid off within thirty years. Sometimes, balloon payments have to be made at the end of the mortgage. You can choose to save for these payments, or invest every month in an insurance policy or investment plan to make sure you can afford the balloon payment after 30 years. The downside of fixed rate is the rigidity of this form. It's not easy to change your mortgage form if you want to profit from low interest rates.

Getting the lowest rate is a good goal, but make sure you get the right kind of mortgage for your situation. If you don't do your research, or search expert advice, you might be looking at trouble down the road.