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Mortgage Q&A: Good interest rate?

Q.

 The Nest Q&AHow do we know if we're getting a good interest rate?

A.

Buying a home and researching the best mortgage for your financial situation? You might assume the lowest rate is naturally the best. Not true! The teaser rates for adjustable-rate mortgages (or ARMs) and "interest-only" mortgages can suck you in with low payments in the beginning, which seems like a smart bet. But what they don't tell inexperienced buyers is that the rates can skyrocket once your "rate lock" wears off. If life doesn't go as planned and your salary doesn't move up as quickly as you expected or you lose your job, then that bump up in those monthly payments can lead to serious financial trauma. It's much better to seek out a 15- or 30-year fixed mortgage. Check out the latest rates at Bankrate.com and plug them into our handy mortgage calculator to play around with what your potential monthly payments may be.

-- The Nest Editors

See More: Mortgages , Buying a Home