| Numerous factors come into play when determining | | | | you'll save thousands of dollars in interest in the long |
| the interest rate you'll pay on a home loan. | | | | run over the same loan with a 30-year term. |
| Downpayment | | | | Your Personal Qualifications |
| The higher the percentage of the purchase price that | | | | Your credit rating and income level are enormous |
| you can afford to make as a down payment, the | | | | factors considered in determining the interest rate |
| lower the interest rate you're looking at. Paying 15% or | | | | offered to you on a home loan. The more you can |
| 20% down can save you thousands of dollars over | | | | prove that you earn and the better your credit (and |
| the life of the loan over paying 10% down. Pay a little | | | | higher your credit score), the lower the interest rate |
| more now or a lot more later - the choice is yours. | | | | you can get. |
| Closing Costs | | | | The Federal Government |
| Along those same lines, the more of your closing costs | | | | Because of loan limits that have been established by |
| you're willing to pay for, the lower the interest rate | | | | Freddie Mac and Fannie Mae at each year's start, |
| you're given. The lender must pay numerous fees to | | | | your loan amount itself could affect your interest rate. |
| close a loan, and the less of these fees you're willing | | | | If the loan amount you're seeking exceeds the current |
| to pay instead of them, the more they're going to | | | | conforming limits established on home loans this year, |
| demand of you in interest. | | | | then your interest rate could increase. |
| Loan Term | | | | Adjustable Rate Mortgages |
| The monthly payments on a shorter term loan are | | | | Adjustable rate mortgages are particularly tricky loan |
| generally higher than those of longer term loans, | | | | products, as the initial rate will likely be less than the |
| however one of the best ways to save money overall | | | | prevailing fixed rate, but once the initial fixed period is |
| on the costs of buying a home is to strive for as short | | | | over, what you'll pay on an adjustable rate shoots |
| a loan term as possible. If you can afford the higher | | | | higher than the average fixed rate, and keeps on |
| monthly payments on a 20-year loan, for example, | | | | climbing. |