Most people will need a loan to make a home purchase. In many cases, it makes sense to get pre-approved for a mortgage before you even begin shopping for a home.
Your pre-approval can provide you with an idea of how much house you can afford. You can shop for loans through a mortgage broker, your local bank or a credit uninion.
When it comes to your mortgage, you may be surprised at the different loan types and payment options available. It can become quite overwhelming.
Some buyers choose a 15 or 20 year loan because the term is shorter and you might be able to lock in a lower rate. On the other hand, the reason30-year loans are so popular is due to the fact that longer-term usually means lower monthly payments. You might have a slightly higher interest rate, but the payments are usually manageable.
You also may have to decide between an adjustable-rate mortgage (where your interest rates vary over time) or a fixed-rate mortgage (where interest rates remain the same despite the market changes or current economy).
Ultimately, you have to decide what makes you feel more comfortable - locking into a consistent payment over losing out on potentially lower interest rates.
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