| Not all low interest mortgage loans were created | | | | truly has a low rate you must read all the details. |
| equally. Some are truly good loans with valid low rates. | | | | Ascertain whether the interest rate is fixed or if it |
| Others are mirages using a low stated interest rate as | | | | adjusts. If it does adjust, then you must know when it |
| camouflage for a higher rate. In order to tell the | | | | does and what calculation is used to figure out how |
| difference you must do your research, and then read | | | | much. You will not be able to know the exact amount |
| the fine print of your mortgage documents before | | | | of your future mortgage payment, but you will be able |
| signing on the dotted line. | | | | to come up with a good approximation. |
| The easiest mortgages to understand are what are | | | | The best low interest rates are those which come |
| called fixed rate mortgages. These loans have an initial | | | | with fixed rate mortgages. This way you know you |
| interest rate which never changes during the course of | | | | are able to have the low rate for the life of the loan. |
| the loan without you desiring it to. It can change if | | | | To get a low rate fixed rate requires good credit and |
| interest rates go down and you wish to refinance. | | | | usually at least a 20% down payment. Currently, the |
| However, it can never be raised by the lender | | | | appraisal also matters greatly and must justify the |
| unilaterally. | | | | purchase price. For those able to get one, a low |
| The second class of mortgages are referred to as | | | | interest rate fixed rate is the way to go. |
| adjustable rate mortgages. These are most often | | | | Some scenarios fit well with adjustable low rate |
| referred to as ARM's. Adjustable interest rate loans | | | | mortgages. One is if you know you are only going to |
| often have a lower initial interest rate than their fixed | | | | own the property for a short duration. If you are sure |
| fate cousins. However, in many instances this is short | | | | you will be selling the property before the first reset, |
| lived. ARM's have a proclivity to quickly rise. | | | | then an adjustable rate can be a smart move. |
| The worst of the variety of ARM's out there are | | | | However, if there is any doubt about the length of your |
| called teaser rate loans. As their name implies, they | | | | ownership then a fixed rate is the way to go. |
| serve to tease borrowers with a very low introductory | | | | Low interest mortgage loans are out there. However, |
| interest rate. However, that low rate does not last long. | | | | you must do your research to ensure you are truly |
| Most teaser rate mortgages rise rapidly once the | | | | getting a low rate. Some rates quoted up front are not |
| introductory period expires. The end is often tragic for | | | | as they appear. You need to drill down to the details |
| the homeowner. | | | | and fine print to make sure you understand exactly |
| In order to know if the mortgage you are entertaining | | | | what you are signing. |