you can save tens of thousands of dollars in
interest charges by shopping for the shortestterm
mortgage you can afford. For each
$100,000 you borrow at a 7% annual percentage
rate (APR), for example, you will pay over
$75,000 less in interest on a 15-year fixed rate
mortgage than you would on a 30-year fixed
rate mortgage.
charges by shopping for the lowest-rate mortgage
with the fewest points. On a 15-year
$100,000 fixed-rate mortgage, just lowering the
APR from 7% to 6.5% can save you more than
$5,000 in interest charges over the life of the
loan, and paying two points instead of three
would save you an additional $1,000.
mortgage rate surveys, then call several lenders
for information about their rates (APRs), points,
and fees. If you choose a mortgage broker,
make certain to compare their offers with those
of direct lenders.
rate mortgages (ARMs) can vary a great deal over
the lifetime of the loan. An increase of several
percentage points might raise payments by hundreds
of dollars a month, so ask the lender what
the highest possible monthly payment might be.
a rate that is lower than your existing mortgage rate
and plan to keep the new mortgage for at least several
years. Calculate precisely how much your new
mortgage (including points, fees and closing costs)
will cost and whether, in the long run, it will cost
less than your current mortgage.
The loans reduce or may even eliminate the
equity that you have built up in your home.
(Equity is the cash you would have if you sold
your house and paid off your mortgage loans.)
If you are unable to make payments on home
equity loans, you could lose your home.
four reputable lending institutions. Consider the
interest rate on the loan and the annual percentage
rate (APR), which includes other costs, such
as origination fees, discount points, mortgage
insurance, and other fees. Ask if the rate
changes, and if so, how it is calculated and how
frequently, as this will affect the amount of your
monthly payments.