Choosing the Right Mortgage Loan

Miranda Marquit
by Miranda Marquit, Contributor

When you buy a house, you are making a huge commitment. A home is a big purchase, and you normally have to get a mortgage loan in order to make the purchase. As a result, it is important to consider different aspects of mortgage advice ahead of time, and make a decision based on what is likely to be best for your financial situation.

Here are some things to keep in mind as you consider mortgage advice and choose the right mortgage loan:

Mortgage Interest Rate
Many lenders offered mortgage advice encouraging teaser rate loans and interest-only loans to consumers. However, this mortgage advice turned out to be faulty in some cases, since it gave some borrowers a false of what they could afford. Instead, look for a fixed-rate mortgage with an interest rate that remains the same through the loan.

Length of the Loan
Consider how long the loan will last. The standard mortgage advice is to get a 30 year loan. You can get loan terms for 40 (or even 50) years, but you might pay a lot more in interest. If you can afford the payments on a shorter loan term, it might be worth it to consider a 15 year loan. You have bigger payments, but you will pay off the loan faster and save money in interest.

Closing Costs
You might find that there are a lot of charges associated with closing on a home mortgage loan. Some good mortgage advice is to look at all the closing costs, and determine which are negotiable. You can comparison shop, and look for a loan that does not charge high fees.

Penalties
Next, consider the penalties that might come with a mortgage. Some mortgage will charge you a penalty if you pay it off early; this includes refinancing a loan. Some good mortgage advice is to look for a loan that does not charge prepayment penalties.

Customer Service
For some people, customer service is important. Find out if your mortgage lender will service your mortgage through the entire loan term, and what kind of personal service you can expect to receive. Some people do not mind if their mortgage is sold to a servicer. However, if you are concerned about this, ask the lender about how they handle loans after the closing.

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No mortgage advice is one size fits all. As you choose your mortgage loan, consider the mortgage advice, and consider your situation. Think about different aspects of the loan you want, and choose a loan that fits your needs and will help you reach your financial goals.