There are several things consumers should consider when applying for a home loan. For instance, they should determine the mortgage amount needed based on the real estate property, which should accommodate all family members adequately and be located near the children’s school or the parents’ work. The mortgage amount should be within the consumer’s means. Online mortgage rate calculators can be used to find out the length of time mortgage amount will have to be paid, the interest rate, and the monthly mortgage premium. There are two loan types that need to be examined–fixed rate and adjustable rate. Fixed rate mortgages (FRM) are home loans that have an unchanged interest rate throughout the entire duration of the loan. A 15-year mortgage with a 7.5 percent interest rate, for example, means that the interest rate will remain the same throughout the 15-year period. An adjustable rate mortgage (ARM) is where the interest rate is based on prevailing trends in the real estate market. This means that if it is a buyer’s market and the mortgage contract needs to be renewed, it may be worthwhile to get an ARM because of reduced interest rates. But there is also a possibility that the mortgage rate will be much higher compared to when the loan was first taken. | Read More