Home Loans and Mortgages

When you are trying to compare mortgage loan rates, there are a few principles that have been maintained throughout the years. This simple formula is the better your credit rating, the more money which you have to put down on your new home, and the fewer years on your mortgage, the better your mortgage rate.

A government mortgage loan generally has a lower rate than any bank out there. These are, for the most part, only available to first time homebuyers. A first time homebuyer does not necessarily mean exactly what the terminology states. A person who has bought a mobile home in the past, for instance, still qualifies as does a person who may have purchased a home through untraditional means such as owner equity.

Your housing type also affects your mortgage rate. A single-family home mortgage is going to be less than a multi-family home, condominium or townhouse for the most part. Keep that in mind when looking around, even though the thought of rental income may be nice, it might not be enough to offset the higher mortgage rate without charging exorbitant rental fees.

Lenders and brokers adjust their rates regularly, which affects your mortgage loan rate. In addition to that, different states have different rates. It is best to do your homework and find out not only what the average rate is in your state or the state you are purchasing the home in but also check with the different lenders and brokers. A little shopping around can save you thousands in the end.

Fixed rate loans versus adjustable rate loans or even balloon loans also carry different mortgage loan rates. Generally, an adjustable rate loan is going to carry a lesser mortgage loan rate than fixed rate loans - but only initially. Later on adjustable rate loans will "adjust" upwards and have a higher rate. Balloon loans can go either way, and have the added liability of large payments at various stages of the loan process. This is not advised for many new homebuyers.

The best mortgage loan rates currently are those that are government backed. The best thing to do is to talk to an expert mortgage counselor, evaluate what you want in a mortgage and what you can handle financially, and you will do quite fine.