- 1). Determine if the mortgage is a fixed-rate or flexible-rate mortgage. Although the flexible rate often starts with a lower interest rate it can jump far higher than any fixed rate. It is hard to tell what a flexible rate is going to change to, so it is safer to go with the low fixed-rate mortgage.
- 2). Look at how long the mortgage lasts. This may be from 10 to 30 years. The shorter your mortgage the lower the overall rate. Although your monthly payment is higher for shorter time periods you pay off your loan quicker.
- 3). Check to see if there is a minimum down payment required. Banks often require you to put down at least 10 percent. If you don't, you are charged a mortgage insurance percentage, which increases your overall loan by up to 2 percent.
- 4). Find mortgage rates for your bank (if your bank supplies mortgages) and an outside financial institution. Typically your existing bank (especially credit unions) offer lower interest rates because they are familiar with your financial history.
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