Finding a good fixed rate on a 30-year mortgage is essential and will save you money on your payment each month. Even a half-point lower in the rate can mean $50 to $100 a month savings on some loans. That can mean more gas in your car or an extra bag of groceries a month. Many different banks offer this type of loan, so competition drives rates to be competitively priced.
Step 1
Direct your browser to http://www.bankrate.com/funnel/mortgages/?prods=1&points=All&ic_id=OA_OvernightAverages_13_Mortgage_30yrfixed_Grid_Default.aspx. This website will provide you with a list of banks and their rates for a 30-year fixed mortgage. Input your state and city as well as the loan amount. Also enter the percentage down you plan to put on the house. Press the "Search" button. Bankrate.com will provide you with a list of local lenders and will tell you the information about each rate, and any fees associated with it. Choose a loan and contact the bank for more detailed information. You may not qualify for the advertised rate.
Step 2
Compare a fixed-rate loan to an adjustable rate mortgage. Fixed rate 30-year mortgages are ideal in times when you expect interest rates to rise in the future. Fixed rate mortgages also give you a predictable payment each month because the interest rate stays steady over the life of the loan. It is a good idea to get a fixed rate mortgage if you plan to stay in your house for many years. An adjustable rate mortgage has an initial period when the rate is fixed, but after that period, the rate adjusts. For example, a 7/1 ARM has an initial rate period of seven years, and its rate adjusts once every year. ARMs are a good choice when you think interest rates will fall in the future or if you plan to stay in a home for a short period. It is important to note that some ARMs are tied to the London Interbank Offer Rate, or LIBOR, and therefore do not rise and fall with the U.S. prime rate.
Step 3
Compare how the term of each loan will affect equity. In general, the longer the term of the loan, the more interest you will pay. A longer-term loan will have lower payments, but you will build equity more slowly than a shorter-term loan. Fixed rate mortgages usually come in periods of 15, 20 and 30 years. A 30-year mortgage is the longest term usually offered by most banks.
Member Comments