This is the worlds leading source of financial content on the web, ranging from market news to retirement strategies, investing education to insights from advisors.
Forex Forever!

Finding the Best Mortgage Rates in 2016

Author: Ethan Williams

Buying a home may be the biggest and most important financial decision of your life, and will likely require a mortgage to fund the purchase. As home-buying technology has progressed, the process of finding the best mortgages rates for 2016 can all be done online. To help you get started, in addition to a brief tutorial on how to shop for a mortgage, the mortgage calculator tool below is a good way to familiarize yourself with the different types of mortgages available in your area for the 2016 calendar year.

The calculator comprises multiple factors to help you narrow the options best suited for your specific needs. You can compare payments between short and long contracts, evaluate a lower initial interest rate on an adjustable-rate mortgage (ARM) versus a more traditional fixed-rate option, or whether an interest-only (I-O) mortgage makes the most sense for you.

Below is a list of factors included in the mortgage calculator:

Credit Score: The credit score is the numeric expression of a person's creditworthiness.

Location: You must select the state in which the mortgage will be taken, and then narrow the location by either the closest city or ZIP code.

Loan Amount: The estimated value of the home or the remaining balance on your incumbent mortgage that you would like to refinance.

Mortgage Points: A mortgage point is equal to one percent of the total amount of a mortgage. There are two types of points: discount points, which represent pre-paid interest on a mortgage; and origination points, which are a fee the mortgage lender may charge a borrower.

Percent Down: Also known as a down payment, or an initial payment made when something is bought on credit.

Products: The type of mortgage you are interested in, such as a traditional fixed-rate mortgage, an ARM, or an I-O mortgage. The ARM option shows a ratio such as 7/1, which represents the amount of years the mortgage carries a fixed interest rate. After the pre-set number of years, in this case 7, the interest rate adjusts according to three factors: the level of the index that the mortgage is tied to, such as the LIBOR; the ARM Margin established at the onset of the loan; and the Mortgage Cap.

Purchase or Refinance: Purchase mortgages are used to finance the purchase of a home. Refinances are used to replace an older loan with a new loan offering better terms, for a fee.

The Bottom Line

Due in part to the accommodative stance that the Federal Reserve has taken to its Federal Funds Rate, the past five years have represented an ideal period to invest in a mortgage. This is due to the generally lower interest rates now available. Although the Federal Open Market Committee just announced its first increase to its benchmark rate in nearly a decade, the 2016 calendar year should still provide ample opportunity to lock in a new mortgage or refinance your existing one.

last five articles

#348 Delaying Social Security Can Add Up

Author: Ethan Davis

Determining when to collect Social Security benefits may be one of the most significant retirement-planning decisions you will make. It will define not only the size of your monthly benefit but also the amount of Social Security income you collect over your lifetime – proving that time really i... see more

#953 Home Improvements That Really Pay Off

Author: Ethan Smith

Despite what you see on TV and what the conventional wisdom says, most of the home improvement projects with the greatest return on investment are unglamorous. According to Remodeling Magazine's 2014 Cost vs. Value report, you'll recoup the greatest percentage of your investment on projects such ... see more

#156 How to Pick the Best Medicare Part D Plan for You

Author: Ethan Jackson

Medicare Part D pays for your subscription drugs, so it's important to pick a plan where most, if not all, the drugs you need are listed on the formulary for the plan. The formulary is a list of drugs the insurer will cover. Brands vs. GenericsCoverage for all drugs is not equal. Each insu... see more

#1699 How Car Insurance Companies Value Cars

Author: Michael Harris

When your vehicle is totaled in an auto accident, your insurance company pays you for the car's value – or, more accurately, it pays you for what it claims the value to be. You can put this money toward the amount you still owe on the totaled car, or you can use it to purchase a new vehicle. Ne... see more

#1651 Winter Home Maintenance Projects You Need To Know

Author: Jacob Harris

During this holiday season, you've likely been busy getting ready for all the parties, activities and family moments ahead. To make sure your home is as prepared as you are, here are six home maintenance projects suited to the colder months of the year:1. Replace Your Windows... see more