There’s no such thing as ‘too low’ of a mortgage rate, but an extremely low rate could come with fine print
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Mortgage rates are at historic lows, and while there are no hidden fees that accompany a low APR, there are a couple trade-offs to keep in mind.
You may find a lower rate with an adjustable-rate mortgage (ARM) than with a fixed-rate mortgage, but the ARM rate could increase when the introductory rate period ends.
If your down payment is under 20% of the home value, you’ll have to pay private mortgage insurance (PMI), which could add hundreds or thousands of dollars to your annual payments.
You probably don’t need to rush to buy a home with a low rate, because mortgage APRs will likely stay low in 2021.
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Mortgage rates are at historic lows, so it could be a good time to buy a home. But you may be wondering whether there is a downside to low rates.
In short — nope, there’s no catch. A low APR can save you thousands over the life of your loan.See the rest of the story at Business Insider
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