Home loans are a burden you will have to bear for a considerably long time. Therefore, it’s always in your best interest to secure the best rate you can find and never settle for anything less.
Home loans usually come in two versions, the standard loan and the adjustable rate mortgage. Standard loans come with a fixed-interest rate throughout the lifetime of the loan. Adjustable rate mortgages, on the other hand, have significantly lower fixed rates for the first five or seven years before the interest rate on the loan is allowed to rise or fall according to the position of the market.
Unless you can be sure that you won’t be staying in the house for a longer period, adjustable rate mortgages should be avoided—as they expose the buyer to the risk of having interest rates rise dramatically in the future.
Choose the shortest duration for your loan, during which you feel you can comfortably settle payments. While you will have to pay more money each month on a shorter term loan, doing so will also mean that you stand to pay much less in interest by the time you finish paying off the loan.
Once you’ve been given a rate that you feel is reasonable and sustainable, consider locking it in. Under normal circumstances, you should be able to do this for free. Otherwise, you will be charged a fee that will be refunded to you at closing.
The Home Loan Arranger 