Preparing to buy a home is mostly about starting to take on the responsibility of paying for it. With most homes you are also getting a mortgage and that is a commitment that can last twenty to thirty years. There are all sorts of different mortgage packages and plans out there to suit people who are in thousands of different financial circumstances and it is sure that there is a combination out there that caters to your unique needs. But with so many choices you also have more decisions to make. That means when you step into your local bank branch or one of the mortgage companies working in your area, you need to know something about mortgages already.

When it comes to choosing a mortgage there are three main things that are going to determine your monthly payments and the total amount that you are permitted to borrow. These are the current interest rates, the term of your mortgage, and the percentage that you're putting down. If you are not in a rush to buy a home and are spending a couple of years saving a healthy down payment (which is a very smart idea) than you may want to pay attention to the current rates and strike when they reach a low point. Some people getting mortgages end up paying more than the original cost of their home in interest alone and a lower rate can really save you a lot in the long run.

When you're looking at interest rates you should remember that you can choose a fixed rate plan or a variable rate. With a fixed rate you will be paying the same interest no matter what happens to the market in the future. With a variable rate, your interest paid is always dependent on what is currently happening. Many people choose to go with a fixed rate because they appreciate the predictability of their payments.

Variations between a fixed and variable rate mortgage? Visit for more information.

Choosing your mortgage term should depend on how long you're planning to stay in that particular property. If this is just a starter home and you think that you will want to upgrade to something larger in a few years than you might want to save up a bigger down payment and go with a shorter term. While you can transfer your loan to a new property with the average mortgage company, this is more about the timeline that you're willing to commit to.

Our last bit of advice is that you should always take some time to choose the right mortgage broker or bank as well as the perfect plan. Many people when selecting a loan or doing a home evaluation will simply go with a company they already know and not shop around. Doing so could save you thousands of dollars in the end.

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