Comparing Home Loans – Like for Like
There are loads of different comparison websites about these days, you can compare prices for everything from car insurance to cell phone tariffs to home loans, but in order to really know whether you’re getting a good deal you’ve got to make sure that you’re comparing like for like, apples for apples as it were. You can’t compare apples and oranges can you, not if you want to know which is the best, but you can compare red apples with green apples to see which is the sweetest.
Home Loans can be pretty confusing, and it’s important that you compare all options in the same way. At the end of the day we all want a good deal but it might not be so clear cut as to decide which really is the best, not without a few tips anyway. Don’t forget to compare these different parts of a home loan deal, in fact, make a list . . .
- Term of the Loan – is how long you’re gonna have to come up with the readies every month. The majority of mortgages these days are over 30 years (wow, that’s a long time) although some mortgages are over shorter terms, say 10 or 15 years. The thing to remember here is that the longer the term of the mortgage, the lower the monthly repayments but the more you will be paying overall – i.e. more interest.
- Interest rate – is another good bit to compare. What you need to remember is that a fixed interest rate will not move for the length of the loan term, but an adjustable interest rate can go up and down periodically. If you need to compare an ARM with a fixed interest rate make sure that you compare the payments all the way down the line, not just the immediate payments, with a mortgage calculator. I know you won’t know exactly how much an ARM might move, but at least it will give you some idea of what to expect.
- Closing costs – are a bit of a sneaky extra which some home loan firms hit you with, and some do not. It’s not only the lender either, it can also include costs for agents, attorneys, state regulations – try to find the lender which has most of these things included for when the time comes. You really don’t want to be hit with massive fees when you thought that you were safely at the end of the tunnel do you?