There is more to your mortgage payment than just the rate. In fact a lower mortgage rate does not always equal a lower mortgage payment. See below why it's important to talk to your Mortgage Broker about your options!
One of the first choices a homebuyer will need to make is whether you want a Fixed-Rate or an Adjustable-Rate-Mortgage loan. The bulk of loans will fit into one of these two categories, however, there is a third option that will allow you to “hybrid” the two.
An Adjustable-Rate-Mortgage, (ARM): The interest rate of the mortgage adjusts periodically based on market conditions. For example, your payment will go up if rates go up and go down if rates go down.
Fixed-Rate Mortgages, unlike the ARM, the interest rate is set at the time you take out the loan and will not change. The term of Fixed-rate loans can be 10 years, 15 years, 20 years, 30 years or even 40 years. 30-year fixed is the most common because it allows your mortgage payment to be the lowest.
Hybrid ARM: Features an initial fixed interest rate for a certain amount of time and then becomes an adjustable-rate for the remainder of the term. Standard terms are 3, 5, 7, or 10 yrs.