In an ideal world of low housing prices, combined with low mortgage interest rates, it can be simpler to determine how much house you can afford. Today’s real estate market that presents skyrocketing housing prices, however, means that the interest rate you pay is extremely important for a number of reasons.
In general, the interest rate you secure will affect the total cost over the lifetime of the mortgage. A mortgage with a fixed interest rate locks in the amount you’ll pay in interest for borrowing the money. However, opting for this type of mortgage could wind up costing more at the beginning of the home buying process.