Mortgage Best Rate » Fixed Rate Mortgage

What Type Of Mortgage Is Best For You?

admin — Sat, 31 Jul 2010 12:28:13 +0000

With all of the different types of mortgages out there, it is difficult to know which one is the right one for you. Here is a quick rundown and brief explanation of a few different mortgages you should consider. Also remember, taking out a mortgage is only a good idea if you have the money to pay it, never take one out on the hope that someday you will be making enough to pay the payments.

A fixed rate mortgage is the most basic mortgage you will encounter on the search for the mortgage. The mortgage interest rates stay constant throughout the term of the loan. With the type you don’t have to worry about the mortgage rates going up on you from month to month. You will know what your payment is going to be every single month.

An adjustable rate mortgage is almost opposite the fixed rate. With this the mortgage interest rate fluxgates based several different aspects of the market. This mortgage is better for the financial institution because it eliminates some of the risk for them, by ensuring if the mortgage rates go up, so do your interest rates. However, this type can lead to lower interest rates as well; in fact they often start a little lower than the fixed rate.

The adjustable isn’t to be confused with the graduated rate mortgages, which also has changing mortgage interest rate; however these rates increase at a steady, planned rate. You will still know each payment before you get it, but it starts lower and get larger as you go on. Good for someone just started a new job or recently moved to a new area and are getting settled.

The final type we’re going to address is the balloon payment mortgage. This mortgage may have mortgage rates that are fixed or adjustable, depending on the bank, but the catch is at the end of the term there is a balance you still need to pay. The monthly payments will be lower, but when the maturity date hits there is a large, usually quite large, payment due. This is mortgage is generally reserved for commercial use and can be dangerous for residential mortgages.

In the end if you still don’t know what mortgage you should get, visit or call your financial institution for some mortgages rates or go online to find yourself a mortgage calculator.

Is a Capped Rate Mortgage Right for You?

admin — Thu, 29 Jul 2010 18:03:10 +0000

The first two considerations you have when arranging a mortgage are what type of mortgage rate is required along with how the mortgage will be repaid. The following article looks at the different mortgage rate options such as fixed rates, discounted rates, capped, variable and tracker rates, along with the main advantages and disadvantages for each option.

When considering which type of mortgage product is suitable for your needs, it pays to consider your attitude to risk, as those with a cautious attitude to risk may find a fixed or capped rate more appropriate, whereas those with a more adventurous attitude to risk may find a tracker rate that fluctuates up and down more appealing.

Following is a description of the different mortgage rate options along with a summary of the main advantages and disadvantages for each option.

Fixed Rate Mortgages

With a fixed rate mortgage you can lock into a fixed repayment cost that will not fluctuate up or down with movements in the Bank of England base rate, or the lenders Standard Variable Rate. The most popular fixed rate mortgages are 2, 3 and 5 year fixed rates, but fixed rates of between 10 years and 30 years are now more common at reasonable rates. As a general rule of thumb, the longer the fixed rate period the higher the interest rate. This is also applicable when considering the percentage loan to value, where borrowing below 75% of the property value will attract a lower fixed rate in comparison to an 85% or 90% loan to value which will attract a higher fixed rate percentage.

Advantages

Having the peace of mind that your mortgage payment will not rise with increases in the base rate. This makes budgeting easier for the fixed rate period selected, and can be advantageous to first time buyers or those stretching themselves to the maximum affordable payment.

Disadvantages

The monthly repayment will remain the same even when the economic environment sees the Bank of England and lenders reducing their base rates. In these circumstances where the fixed rate ends up costing more, remembering why the initial decision was made to select a fixed rate, can be helpful.

Discount Rate Mortgages

With a discount rate mortgage, you are offered a percentage off of the lenders Standard Variable Rate (SVR). This takes the form of a reduction in the normal variable interest rate by say, 1.5% for a year or two. The common mistake of those considering a discount rate, is to assume the higher the percentage discount offered, the better the deal. The key bit of information missing however, is what the lenders SVR is, as this will dictate the actual pay rate after the discount is applied.

As with a fixed rate, the longer the discount rate period the smaller the discount offered, and the higher the rate. Shorter periods such as 2 years will attract the highest levels of discount. In addition when considering the amount to be borrowed, the increased risk to the lender of providing a 90% loan will be reflected in the pay rate, with lower borrowing amounts attracting more competitive rates.

Advantages

Should the lender reduce their standard variable rate your interest rate and monthly payment will also reduce.

Disadvantages

When the lender or Bank of England increases their base rate, your mortgage payment will also increase. However in some circumstances lenders do not always pass on the full amount of a Bank of England base rate reduction.

Affordability of the mortgage at the end of the discount rate period should be considered at outset. There are no guarantees that follow on rates will be available, and so you should make certain that you are able to afford the monthly payment at the lenders standard variable applicable upon expiry of the discount rate period. Allowing for an increase in interest rates above the SVR would be prudent to avoid a ‘Payment shock’.

Tracker Rate Mortgages

Tracker rate mortgages guarantee to follow the Bank of England base rate when it moves up or down. Tracker rates are expressed as a percentage above or below the Bank of England base rate such at +0.5% over BOE base rate for 2 years.

The most popular tracker rate mortgages have been 2 and 3 year products, but there is now an increasing demand for lifetime tracker rates as borrowers are starting to realise that the Bank of England base rate has been reasonable competitive, and having a mortgage product linked to it could be beneficial in the long term.

Advantages

A tracker rate guarantees to follow the Bank of England base rate for however long the tracker rate is set up for. This means that as soon as the Bank of England cuts rates, a tracker rate mortgage guarantees to reflect the new lower rate and repayment.

The overall cost calculation of a Lifetime tracker rate can be significantly lower than taking shorter term mortgage products with the ongoing costs of remortgaging such as valuation fees, legal fee and lender arrangement fees. Lifetime tracker rates often have no early repayment penalty restrictions.

Disadvantages

The mortgage payment will go up if the Bank of England increases the base rate. Early repayment charges are likely to be applicable during the benefit period, and as with other types of mortgage rate are likely to be 6 months interest or 3% – 5% of the loan.

Variable Rate Mortgages

Variable rate mortgages are more commonly known as the lenders Standard Variable Rate (SVR), and are the rate that you come onto after the expiry of a fixed, discounted, tracker or capped rate mortgage. A variable rate is similar to a tracker rate in as much as the lender will base their SVR on the Bank of England base rate plus a loading of between say 2.5% and 3.5%. That is where the similarity ends however.

Advantages

The main advantage of being on the lenders Standard Variable Rate (SVR) is that there will be no early repayment charge for redeeming the loan in full. This provides a certain amount of flexibility when there is uncertainty in the market about where rates are moving. For those wishing to fix their mortgage rate, an SVR with no early repayment charge can provide the breathing space required to just wait and see before committing.

Whilst not always the case lenders do tend to pass on reductions in the Bank of England base rate through their SVR, and so those on the SVR will benefit from a reduction in the mortgage payment.

Disadvantages

Generally the SVR will be a higher rate of interest and so your mortgage payment will be greater than if you were on a tracker rate, fixed rate or discounted rate mortgage product. In addition, as has been seen in the past, some lenders do not pass on any or all of a reduction in the Bank of England base rate which results in a higher monthly payment in comparison to other mortgage options.

Capped Rate Mortgages

The capped rate is a variable rate mortgage which has a fixed limit to how far the interest rate can increase (the cap), and provides the option to know the maximum level of mortgage payment from outset. Capped rate mortgages offer the best of both worlds for those with a cautious attitude to risk, but who still wish to benefit from interest rate reductions. For example if the cap is set at 6% and the banks rates go below this rate, then your repayments will go down to reflect the reduction, with the guarantee that should rates go above the 6%, your payments will remain based on the maximum 6% because of the cap.

Advantages

If the Bank of England base rate falls resulting in a fall in the lenders standard variable rate below the level of the capped rate, then your monthly repayment will reduce. For many this provides the peace of mind and certainty for ease of budgeting offered by a know maximum monthly payment.

Disadvantages

Because a capped rate offers the best of both worlds to the borrower, the capped rate is usually uncompetitive as lenders need to price in the risk of rate reductions, leaving those such as first time buyers or those stretching their affordability, exposed to a higher rate than would be available with a fixed rate. This means that UK lenders generally don’t offer capped rate mortgages with any sort of competitive rate, preferring to market fixed rates instead.

Homeowners Face Fixed Rate Mortgage Misery

admin — Wed, 23 Jun 2010 18:03:14 +0000

The current mortgage market is a difficult one for buyers, with rising interest rates causing considerable consternation among homeowners. But for those on fixed rate mortgages, the next few months could prove particularly painful, as deals come to an abrupt end and mortgage payments shoot up. In some cases, monthly mortgage bills are expected to leap as much as 40%.

In the summer of 2005, tens of thousands of people took out a two-year fixed rate mortgage, making the most of interest rates as low as 4.25%. Since then, however, the Bank of England has raised interest rates four times to an uncomfortable 5.5%; and some economists are predicting a further rise in July, with a possible 6% interest rate before the end of 2007.

Investment bank Credit Suisse has estimated that one in five British homeowners switched mortgages to fixed rate mortgages in August 2005. If you are one of those borrowers, you may now face a shock as your two-year arrangement ends, and you move onto your lender’s far steeper standard variable rate (SVR) – generally around two per cent above the bank rate. Some are even predicting that payments could rise by a third or even more for those who took out interest only mortgages – with repayments on a £400,000 interest only mortgage increasing from about £1,400 a month to about £2,000, a staggering rise of 43 per cent.

Even if you signed up to a good fixed rate mortgage that now allows you to shop around for new deals, you may struggle to re-finance the purchase of your home for anything less than 6%. In addition, banks and building societies have hiked their arrangement fees to £1,000 or more, a hefty increase on the fees charged in June 2005, when the best fixed rate carried an arrangement cost of just £389.

Such tales of doom and gloom, however, should not overly deter the canny homeowner. Lenders may offer good fixed rate deals in the hope that you will forget to move your mortgage at the end of the fixed term. You will then find yourself paying potentially punishing rates on their SVRs. The obvious advice is to keep a close eye on your mortgage arrangements and shop around for the best deal.

In addition, be wary of fixed rate deals that lock you in, charging a fee if you want to move the deal within a certain time-frame. For example, a two-year fixed rate deal might have a ‘collar’ that stops you from switching deals for a further three years or even more. With the interest-rate hikes of the past 10 months, many homeowners on such locked-in deals might now be finding themselves forced to face stiff payments. To avoid such pitfalls, avoid fixed rate mortgages with extended redemption penalties. You will then retain your freedom to shop around for the best deals once the fixed rate comes to an end.

Also be wary of merely looking at interest rates. Some lenders will offset low rates with higher arrangement fees. Or lenders might offer substantially lower mortgage rates to customers who also buy buildings and contents insurance from them. If those insurance premiums are high, they offset the low rate – the lender makes a profit, but you may have unwittingly missed out on a good mortgage rate.

“Many existing borrowers now face substantial payment increases as their favourable fixed rate deals of old come to an end,” said Sophie Neary, product director at BeatThatQuote.com. “In this market, it has never been more important to shop around the mortgage lenders and plan ahead carefully.” BeatthatQuote.com has extensively researched the market, locating the best mortgage products and lenders for individual circumstances. Using a service such as this could help you better manage current uncertainties, ensuring you get the best out of your finances now and well into the future.

Fixed Rate Mortgage – Security In Turbulent Times

admin — Fri, 11 Jun 2010 16:55:21 +0000

Fixed rate mortgage at the name suggests is a mortgage whose interest rates cannot be altered. Fixed rate mortgages are usually a characteristic of a mainstream mortgage and thus are offered to people with good credit ratings. People who are sure of their method of repayment and people who prefer certainty usually take the fixed rate mortgage. Fixed rate mortgages usually have a high rate of interest though the borrower is sure of the overall payment at the end of the mortgage period.

Fixed rate mortgages allow the borrower to plan their payment installments and are stress free since the borrower is always aware of the installment obligation. Fixed mortgage rate is also advisable for people with good liquidity since it takes a shorter period to complete the mortgage plan. The borrower is allowed to pay the principal amount early and this is to their advantage since they reduce the level of interest payment. This characteristic tends to alter the title of the mortgage but the ‘fixed’ title is due to the fixed repayment period.

The interest rates of fixed rate mortgage increase with the increase in the repayment period. Fixed rate mortgage for a short period will have lower interest than that of a longer period. In the United States, people prefer fixed rate mortgages that have a period between 10 to 30 years, which is a considerable period for the loan repayment. It is advisable that the borrower pays the principal as fast as they can to ensure that that they pay lower interest rates in the subsequent years. The fixed rate mortgage is suitable for people who want to have their dream home. This is because they can take a big mortgage and fund it over a long period at a constant installment rate.

In addition to this certainty, a fixed rate mortgage is advantageous more so when one gets a salary increase since the interest rate remains the same and thus, there is an increase in one’s disposable income. They are also good mortgages when the interest rates are low since there is no pressure in paying the installments. In case the market mortgage rates increase, the fixed mortgage rate interest does not increase and this is an advantage to the borrower. It is one of the best mortgage plans for people who are not risk takers since they are certain of the payments unlike the adjustable mortgages that move with the market trend.

The fixed rate mortgage is a disadvantage since as market trends change, there are better rates and custom mortgages that are coming up allow one to take full advantage of this. Moreover, people like changing with the financial times. The fixed rate mortgage interest is rigid thus even when there are better mortgage rates, its rates cannot be adjusted. The fixed rate mortgage is also a disadvantage more so when the interest rates are high since there are no adjustments that can be made.

It is advisable that before one takes up a fixed rate mortgage, they should calculate the overall cost that they would have to pay to ascertain that they are able to fund the costs.

A Fixed Mortgage Is The Right Way To Go!

admin — Sat, 22 May 2010 17:01:45 +0000

It doesn’t matter whether you’re a first-time homebuyer or an old pro, you are likely to find the entire process of getting a mortgage can be gut wrenching. Making the most of the situation is possible, if you think clearly and examine all the options carefully. One of the biggest things you’ll need to consider is what type of mortgage you want. You will find there are two major options: adjustable rate and fixed rate mortgages.

Both adjustable rate and fixed rate mortgages will work to get potential homeowners into a home. Almost every bank, credit union and lending company will offer loan programs that cover both types of mortgages. But, for many homebuyers, the fixed rate mortgage turns out to be the more desirable lending vehicle.

Why is this? A fixed rate mortgage might not offer the flexibility and chances for lower payments than expected that an adjustable rate mortgage does, fixed does provide people with a better sense of stability. There are a number of advantages to the fixed rate mortgage that make it so appealing. They include:

* Rates don’t change. A fixed rate mortgage is stable in its very nature. Whatever interest rate is present at the beginning of the loan is present at the end. While this means payments won’t go down with interest rate changes, it also means they won’t go up. Many homeowners prefer this for budgeting reasons and security.

* Fixed rate mortgages enable homeowners to plan better. Since a homeowner will know exactly what their payments will be no matter what, this type of mortgage takes the “surprises” out of making the bills. This is good for those who don’t have an ability to handle higher payments from time to time. It’s also a smart idea for those who are having trouble dealing with the little surprises homeownership comes with in and of itself. The ability to plan can also enable a great ability to pay bills on time and improve credit ratings so a better fixed rate mortgage can be obtained down the road.

* Ability to lock in a rate. A fixed rate mortgage obtained at the right time can ‘lock in’ rates that are more favorable. Those who happen to have good credit and get fixed rate loans at times of lower interest rates will find they might pay a whole lot less over the life of a loan than someone who buys into an adjustable rate loan.

Buying a home is a very big deal. Many who go into homeownership don’t realize the kinds of financial surprises that go along with it. To ensure at least one surprise doesn’t happen, many borrowers opt to go with fixed rate mortgages. Providing payments that stay the same no matter what happens to the market, a fixed rate mortgage enables planning and can even give a peace of mind that homeowners appreciate.

While a fixed rate mortgage is the choice of many, it isn’t the only option. Borrowers should carefully weigh all their options and choose the best one to meet their personal needs and circumstance.

Use A Mortgage Calculator To See If A Fixed Rate Is Always Better Than An ARM Rate

admin — Tue, 06 Apr 2010 02:30:46 +0000

There’s a lot to take into consideration when looking at current interest rates because it’s possibly a decision that you’re making for the next 30 years. The two basic mortgage loans are a fixed rate mortgage and a ARM rate, or adjustable rate mortgage. One isn’t better than the other, but they are better for your situation compared to someone else’s.

You can use a Mortgage Calculator to determine the best monthly payment available. All the different types of loans have different interest rates and different factors to take into consideration.

A Fixed Rate Mortgage is the most popular loan available. It’s an interest rate that stays the same over the course of the loan no matter what. If you get a 5% fixed rate and interest rates shoot up to 10% you still only have to pay the 5%. Also, if you get a rate of 15% and interest rates go down to 6% you can refinance for cheap and save a lot of money on your monthly payment. That’s why it’s the most popular.

An ARM Rate mortgage is the next level up in the risk category. You might see something like 3/1 year ARM rate. Let’s say you can get 4.50% which is better than the fixed rate of 5% so it looks more attractive from the start. Well, the “3″ in the 3/1 means that the 4.50% stays the same for 3 years no matter what. Then it adjusts up or down at a maximum of 2% with the new current interest rates. So if the new interest rate is 6.0% then yours will jump 1.50%. You should use a free mortgage calculator to see that it’ll increase your monthly payment by a lot. Then the “1″ in the 3/1 means after the 3 years go by, the interest rate only stays the same for 1 year at a time. It could be a lot of added pressure to the already high stressed home buying experience.

ARM rates are a great idea when interest rates are high, like 20 years ago when the were in the teens. The odds are higher that they will drop because they’re abnormally high. When rates are this low however, you’re much better off choosing the fixed rate.

Sometimes people only plan to own for 2-3 years when they’re buying a home. Then you can go after the 4.50% for 3 years because the interest rate wont change over that amount of time. Other than that situation, I don’t see any reason to get an ARM rate in this economy.

Things To Consider When Choosing A Fixed Rate Mortgage

admin — Wed, 31 Mar 2010 16:50:19 +0000

Considering whether you need a 30 or 15 year fixed mortgage rate is important for people looking to buy a home and concerned about their monthly payments. Of course the goal for most people with a mortgage is to pay it off early and save themselves a great deal of money in interest repayments. However, before you rush in and sign any papers, there are points to contemplate. Probably the most important point is a guarantee of a constant interest rate for the duration of the loan.

Avoid the mortgage loans offered by some lenders, those that sound unbelievable because they usually are. For loans that have 15 year fixed mortgage rates, the same amount of interest is maintained throughout the life of the loan. This is of great benefit for anyone that does not like surprises. My wife and I looked into the loans available with 15 year fixed mortgage rates when we were searching for a home for sale.

Our aim was to pay of the mortgage as soon as we could without getting into trouble with high monthly payments. This meant we had to consider 30 year fixed rate mortgage plans as well as those of 15 years. Because we didn’t still want to have a mortgage close to retirement, we hoped we would be able to afford a shorter 15-year fixed rate mortgage. Too much pressure was placed on the early repayment of the mortgage loan.

It took some time but we finally chose to go ahead with the 30-year mortgage plan. Reaching the decision we did was the only one that made sense. The main reason was that I found out my wife was pregnant. As she intended to raise our child at home we couldn’t rely on her financial income to the monthly expenditure. The financial commitment per month on the 15 year fixed mortgage rate was just too high. For us it just wasn’t feasible as we would just be in over our heads. The monthly payments on a 30-year loan were quite a bit lower.

If we have spare cash throughout the year then we can use it to reduce the capital sum. If you make a handful of extra payments throughout a twelve-month period you can knock years off of your loan. This is well worth it in the long term but it does require some discipline. It was hard going against our preference for a shorter term, 15 year fixed rate mortgage, but we had to think about more immediate needs and abilities. All things considered, it all worked out for the best in the end.

Get The Best Mortgage Deals Online

admin — Mon, 22 Mar 2010 02:27:58 +0000

Are you after some great deals on fixed rate mortgages? Looking for ways to make your payments lower? Fixed rate mortgages can benefit you in a number of ways. If you wish to know how a fixed rate mortgage can help you, read on.

Possession of a house is part of the American dream for almost everyone, but today’s economic situation and the fiscal issues that plague many individuals are making this goal virtually unattainable for most. Still, it is not an impossible dream. With a small bit of research and effort, steady employment and good credit, you can locate a mortgage that suits you perfectly.

You’ll find that the most beneficial fixed rate mortgage contracts will be able to noticeably reduce your monthly mortgage payments, and give you the security of a rate that won’t be always shifting. You’ll get a fixed rate of interest that will let you know exactly how much you’re going to pay. You might be paying more than an flexible rate mortgage, but you’ll still save a bunch of cash in the long term.

If you can put down at least 20% of your home’s total cost as a deposit, the fixed rate mortgage that you obtain will be optimal. Your credit score is the main factor in approving this mortgage. You also need to be able to prove that you’re someone who has historically made regular repayments, which means that you won’t present the bank with much risk.

More people have a fixed rate mortgage than any other mortgage in America. With fixed rate mortgages, your interest rates will never vary for the life of your loan. Obtaining a fixed rate mortgage has advantages that aren’t found in adjustable rate mortgages. When you want to look up what loans will be best for you, you should look into loan amounts, loan terms, and rates of interest in your research. Utilizing these details, it’s relatively easy to calculate how much you’ll have to pay each month using various online tools.

You may find it hard to get mortgages at all if you’re credit is bad enough. Make certain your credit is as good as it can possibly be before you apply for bad credit home mortgage loans, as that can improve your chances. A majority of banks will dismiss your application, but you’ll still be able to identify lenders which are willing to take you on despite your past credit history. In these instances, you should anticipate that you’ll have to put down a really large deposit and will have a more substantial interest rate.

Plenty of research is necessity in order to apply for a home mortgage loan, so make sure to do this. Learn as much about your credit score as you possibly can so you can fix any potential errors. You’ll be able to get fantastic fixed rate mortgages this way.

Fixed Rate Mortgages: The Ups and Downs

admin — Sun, 21 Mar 2010 18:03:40 +0000

As the title of this article would suggest, I am going to take you on a journey through the ups and downs on fixed rate mortgages. When buying a house, especially the first one, I think that it is literally the most terrifying experience that I have been through, and I have combat experience as a military veteran. For those of you who find yourselves still anticipating the purchase of your first home, let me give you a brief rundown of what it is and what it isn’t. What it isn’t will be the easies to tell you about. It isn’t like going to the store and buying what you want by swiping your card. It isn’t even like buying a new car, although the new car buying experience is a little bit closer. It is like looking at dozens of houses that you hate in order to find one that you like, only to learn that it is $10,000 more than you wanted to spend. So you make an offer and wait to see if the seller takes the offer or sends back a counter-offer. Once the game of offer/counter-offer is through you set up a closing date. At the closing you sit down and sign enough papers to make Leo Tolstoy quake in his boots. Once that hour devouring procedure is done, the house is yours and you are in debt for 30 years. Sounds appealing doesn’t it? Well, actually, it really is. But, before you get to the point where you can sign all those papers, you have to decide on what kind of loan will be best for you. There are a couple of different options and, in this first installment, I will discuss the fixed rate mortgage.
Overview of a Fixed Rate Mortgage

As the name would suggest, the fixed rate mortgage is a loan that has constant payments. By constant I don’t mean that they will be due every month (although they will), rather I refer to the fact that they do not change. If you get a fixed rate mortgage and the payments are $900 per month, they will remain at $900 for the duration of your loan. Nothing changes, it is set in stone, and you can set your clock by it, $900 a month for 30 years.

Benefits of a Fixed Rate Mortgage.

There are a number of benefits to having a fixed rate mortgage. I would like to discuss two of them, the planning power that it gives, and the financial liberty that you can take from it. Let’s start with the planning power.

Planning Power
To take on the responsibility of a $150,000, $200,000, or even $1million dollar debt is, as a mentioned before, very scary. But, to know that all you will ever be required to pay is $900 a month (or whatever your payments end up being. I don’t in any way want to insinuate that all mortgage payments are going to be $900 if you get a fixed rate.) is a very comforting piece of knowledge. You can plan your budget around that amount and make sure that you can always afford it. It really helps things out to have that amount set in stone. The next thing that most people get out of a fixed rate mortgage is financial liberty.

Financial Liberty
What I mean by that would be best communicated in the description of a hypothetical scenario. Picture a young couple, just out of college, just married, and brand new at the jobs in their respective careers. They decide to take out a loan and buy a house. They, because of the salary restrictions that they are working with, can only comfortably afford $500 a month. They know that this won’t get them the house that really want so they decide to stretch a lot financially and get a house that will run them $800 a month. After two years they both get promotions and their bills get easier to pay. After another two years they both move into management and get more promotions. Suddenly they find themselves in a position where they can actually comfortable afford to make $900 a month payments, and later on they can make $1000 a month payments, but they don’t have to. All they are required to do is $800. Every amount of money that they pay over $800 in a month goes towards paying off the principle and this gets their house paid off much faster. When the house is paid off, there is $800 a month that is no longer being tied up in living expenses. You see, in a fixed rate, 30-year mortgage, it will take 22 years to pay half of the principle because so much of that money is going towards the interest. If you consistently pay more each month than the minimum payment you can pay off a 30-year mortgage in 20 years easily.

Final Synopsis
For the young, first time homebuyer with a solid income, a fixed rate mortgage is a pretty good option. It allows, as was earlier stated, predictability and the possibility for earlier financial liberation. For the older first time homebuyer this is the best option. The ability to pay off a mortgage in less than 30 years is something that becomes very important as retirement approaches. For the buyers that are on a much tighter, less predictable budget, this may not be the best option. In that case there are other mortgages that would be better suited for their needs. But, as with all mortgage and real estate decision, sit down with a professional who can assess your individual needs and come up with a plan that is right for you.

Should You Go For Fixed Rate Mortgage Loan

admin — Sat, 23 Jan 2010 22:44:55 +0000

There is always a debate when home buyers have to decide on the merits of 15 or 30 year fixed mortgage rates. Paying the mortgage off early is important for many people that buy a home later in life. It may take some time to reach a decision as there are many things to contemplate. Home buyers looking into this need to be assured their monthly payments will not increase.

It seems that some lenders are happy to offer deals that appear too good to be true and they usually are. A fixed rate mortgage maintains a set interest rate during the period of the loan. For many people with regular incomes, this is a definite benefit as there are no hidden charges. Both my wife and I decided to research fixed rate mortgages when we started looking at homes for sale.

The plan was to pay off the house as soon as possible but we did not want to be burdened with high monthly payments. Considering longer term fixed rate mortgages was one option if we could not afford a 15 year plan. Still, having a mortgage close to retirement was not what we were looking for, so we decided to try for a loan with a 15 year fixed mortgage. It was not easy for us because of the stress to pay the house off early.

We thought about it long and hard and despite the pressure we decided to go with the 30 year loan plan. There are always a number of points to think about when a decision like this has to be made.Discovering my wife was having a baby was the most important reason. The contribution my wife made to the monthly finances would be unreliable since she intended to raise our child at home. The downside to the 15 year fixed mortgage rate was the higher monthly repayment.

We knew that it just was not an option and the risk was too great. After looking at the much lower amount we would be paying per month with a 30 year mortgage loan, there was not any option but to go with it.

We are also able to make extra payments throughout the year to make the principal shrink quicker. By making just a few of these payments each year we discovered that a number of years could be taken off the mortgage term.

In the long term, this is a strategy well worth pursuing if you are able. Our first choice would have been to go for the short term 15 year fixed rate mortgage solution but this did not help with our more immediate situation. In retrospect, everything worked out ok for us by going down this road.

Mortgage Best Rate » Fixed Rate Mortgage

What Type Of Mortgage Is Best For You?

Related posts:

Home Mortgage Refinancing: Choosing the Best Type

Is a Capped Rate Mortgage Right for You?

Related posts:

Remortgages Proving Popular After Interest Rate Hikes

The Rise of Fixed Rate Mortgages

Variable Rate Mortgages, are They the Best Choice?

Homeowners Face Fixed Rate Mortgage Misery

Related posts:

Fixed Rate Mortgage Misery?

The Rise of Fixed Rate Mortgages

25 Yr Fixed Rate Mortgages

Fixed Rate Mortgage – Security In Turbulent Times

Related posts:

Are fixed rate mortgages better?

Four Benefits of a Fixed Rate Mortgage

Fixed Rate Mortgages – How to Secure the Best Fixed Rate Mortgages

A Fixed Mortgage Is The Right Way To Go!

Related posts:

30 Year Fixed Rate Mortgages Modernized

Fixed Versus Variable – the Mortgage Battle

Are fixed rate mortgages better?

Use A Mortgage Calculator To See If A Fixed Rate Is Always Better Than An ARM Rate

Things To Consider When Choosing A Fixed Rate Mortgage

Related posts:

Choosing a Mortgage: Adjustable Rate Vs. Fixed Rate

Choosing a Fixed or ARM Option

Compare the Fixed Rate Mortgage With an Arm

Get The Best Mortgage Deals Online

Related posts:

25 Yr Fixed Rate Mortgages

Home Loan Purchases – Try a Online Finance Calculator Along With a Broker To Assist You

Best Fixed Rate Mortgage Deals

Fixed Rate Mortgages: The Ups and Downs

Related posts:

Fixed Rate Mortgages

Are fixed rate mortgages better?

25 Yr Fixed Rate Mortgages

Should You Go For Fixed Rate Mortgage Loan

Related posts:

Homeowners Face Fixed Rate Mortgage Misery

Fixed Rate 30 Year Mortgages-The Correct Mortgage Loan Choice

Fixed Vs. Adjustable Rate Home Mortgage Loan

Mortgage Best Rate » Fixed Rate Mortgage

What Type Of Mortgage Is Best For You?

Related posts: Home Mortgage Refinancing: Choosing the Best Type

Is a Capped Rate Mortgage Right for You?

Related posts: Remortgages Proving Popular After Interest Rate Hikes The Rise of Fixed Rate Mortgages Variable Rate Mortgages, are They the Best Choice?

Homeowners Face Fixed Rate Mortgage Misery

Related posts: Fixed Rate Mortgage Misery? The Rise of Fixed Rate Mortgages 25 Yr Fixed Rate Mortgages

Fixed Rate Mortgage – Security In Turbulent Times

Related posts: Are fixed rate mortgages better? Four Benefits of a Fixed Rate Mortgage Fixed Rate Mortgages – How to Secure the Best Fixed Rate Mortgages

A Fixed Mortgage Is The Right Way To Go!

Related posts: 30 Year Fixed Rate Mortgages Modernized Fixed Versus Variable – the Mortgage Battle Are fixed rate mortgages better?

Use A Mortgage Calculator To See If A Fixed Rate Is Always Better Than An ARM Rate

Things To Consider When Choosing A Fixed Rate Mortgage

Related posts: Choosing a Mortgage: Adjustable Rate Vs. Fixed Rate Choosing a Fixed or ARM Option Compare the Fixed Rate Mortgage With an Arm

Get The Best Mortgage Deals Online

Related posts: 25 Yr Fixed Rate Mortgages Home Loan Purchases – Try a Online Finance Calculator Along With a Broker To Assist You Best Fixed Rate Mortgage Deals

Fixed Rate Mortgages: The Ups and Downs

Related posts: Fixed Rate Mortgages Are fixed rate mortgages better? 25 Yr Fixed Rate Mortgages

Should You Go For Fixed Rate Mortgage Loan

Related posts: Homeowners Face Fixed Rate Mortgage Misery Fixed Rate 30 Year Mortgages-The Correct Mortgage Loan Choice Fixed Vs. Adjustable Rate Home Mortgage Loan

Related posts:

Home Mortgage Refinancing: Choosing the Best Type

Related posts:

Remortgages Proving Popular After Interest Rate Hikes

The Rise of Fixed Rate Mortgages

Variable Rate Mortgages, are They the Best Choice?

Related posts:

Fixed Rate Mortgage Misery?

The Rise of Fixed Rate Mortgages

25 Yr Fixed Rate Mortgages

Related posts:

Are fixed rate mortgages better?

Four Benefits of a Fixed Rate Mortgage

Fixed Rate Mortgages – How to Secure the Best Fixed Rate Mortgages

Related posts:

30 Year Fixed Rate Mortgages Modernized

Fixed Versus Variable – the Mortgage Battle

Are fixed rate mortgages better?

Related posts:

Choosing a Mortgage: Adjustable Rate Vs. Fixed Rate

Choosing a Fixed or ARM Option

Compare the Fixed Rate Mortgage With an Arm

Related posts:

25 Yr Fixed Rate Mortgages

Home Loan Purchases – Try a Online Finance Calculator Along With a Broker To Assist You

Best Fixed Rate Mortgage Deals

Related posts:

Fixed Rate Mortgages

Are fixed rate mortgages better?

25 Yr Fixed Rate Mortgages

Related posts:

Homeowners Face Fixed Rate Mortgage Misery

Fixed Rate 30 Year Mortgages-The Correct Mortgage Loan Choice

Fixed Vs. Adjustable Rate Home Mortgage Loan