Mortgages are generally the largest piece of credit a person will hold throughout their life. That being said, it is incredibly important to understand what rate options you have and how to choose a mortgage that will work for you. While there are many different types of mortgages and rates offered in Alabama, finding the right mortgage is as simple as asking yourself a few questions.
Fixed Rate Mortgages in Alabama
Are you comfortable with risk? If the answer is no, a fixed rate mortgage may be the best option for you. Fixed rate mortgages offer a guaranteed rate for a negotiated term. This type of mortgage provides peace of mind, protecting you from the ups and downs of the housing and lending markets. Additionally, fixed rate mortgages offer a set payment that does not fluctuate. If you are on a budget and are not comfortable with a fluctuating payment, fixed rate mortgages are the best option. While many lenders in Alabama offer fixed rate mortgages at great prices, keep in mind that to compensate for this market security your rate may be slightly higher than an adjustable rate mortgage.
Adjustable Rate Mortgages in Alabama
Can you handle payment fluctuations? Many lenders in Alabama are now offering adjustable rate mortgages. Adjustable rate mortgages often boast a lower interest rate than the current fixed rate mortgages. While they are an excellent means to save money when rates are low, these mortgage rates may increase (or decrease) throughout their term. Depending on the lender, this may mean that your payments are adjusted in real time, increasing if the rates increase and vice versa, or your payments may be recalculated upon your mortgage renewal. The best way to utilize an adjustable rate mortgage is to take advantage of the often lower rate by making a slightly higher payment. This will allow you to pay down your principal fast, and save on long-term interest costs.
Hybrid Mortgage Rates in Alabama
Are you still unsure of whether you’d like a fixed or adjustable rate mortgage? Don’t worry; you’re not alone! For those of you who want the benefit of the low interest rate found in an adjustable rate mortgage but also want the security and peace of mind of a fixed rate mortgage, Alabama lenders are now offering what is known as a hybrid mortgage. These mortgages often begin with an adjustable rate, and eventually move into a fixed rate term, allowing you to have the best of both worlds.
Find a Mortgage Loan in Alabama Today
Now that you’ve done some homework, you should have a good idea of what type of mortgage rate you’re looking for. Perhaps you want a slightly higher, but more secure fixed rate mortgage. Or maybe you’re concerned about having the lowest monthly payment possible and are interested in the adjustable rate mortgage. You might fall in the middle, and decide to go with a hybrid mortgage. Whatever you choose, eHomeMortgages is standing by to offer you quotes and to compare rates on Alabama mortgages.