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Whether you're financing a new home, or refinancing, you'll have plenty of choices. In addition to banks, you may be able to borrow from the seller, a relative, an insurance company, or through a mortgage broker. Create a
Mortgage payments chart
to compare your loan options. The best loan for a short term owner is not necessarily best for a long term owner. Settling in for life? Consider a mortgage with higher up-front costs, because the interest rate will be lower. Moving in 5 to 7 years? You may be better off not paying points -- or taking an adjustable rate mortgage (ARM) with a low "introductory" rate.
ARMs are unpredictable. Unless you'll be moving soon, or are a gambler, avoid them -- unless you can protect yourself from the risk of future rate hikes.
The size of the mortgage, or mortgage amount, is the sales price minus down payment plus any costs you are financing rather than paying in full at time of loan closing.
Mortgage payments
chart can help you find out what a particular rate will mean in terms of a monthly payment, and help in comparing different interest rates.
- Find the MORTGAGE RATE in the far left column.
- Follow that line across to the column with the length of TERM of the loan.
- Multiply that figure by the mortgage amount divided by one thousand.
This gives you the monthly cost for principal and interest, which is the largest portion of the mortgage payment. Add monthly figures for tax and insurance to get the monthly mortgage payment.
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