| |
Fixed Rate Mortgage
Today, having a fixed rate mortgage is no longer the
only option. In the past, people purchased homes for
the long haul, typically. Now, with so many people looking
to make money by getting into and out of a property
quickly, adjustable rate mortgages are also a popular
option. Yet fixed rate mortgages still appeal to a large
segment of the homebuying population. A fixed rate mortgage
is designed specifically to benefit people who plan
to settle down and stay in their houses for a long time.
Initial interest rates are usually higher than those
of adjustable loans. However, having a fixed rate ensures
that a borrower will not be forced to deal with rising
interest and rising monthly payments each year. A large
portion of people who pay mortgages choose to go with
a fixed rate. The fact that a fixed rate loan is easier
to secure than an adjustable rate loan has a lot to
do with it. Also, many people simply cannot handle the
uncertainty that comes with a fluctuating loan. A person
with a fixed rate always knows what he has to pay in
interest and what he needs to pay to bring down the
principal throughout the entire loan term. A lot of
people also just want to believe that once they buy
a home they’re going to stay in it.
Choosing A Long-term or Short-term Fixed Rate Mortgage
The choice between a long-term and short-term mortgage
is not a choice that everyone gets to make. Short-term
mortgage loans are often much harder to get, because
a person’s credit rating has to be better than it does
for most long-term loans. However, for those who have
the option, choosing one over the other depends on a
person’s priorities. Short-term fixed rate mortgages
usually span 15 years. During that time, a person will
make higher monthly payments, but he will have a lower
APR. The lower rate of interest and the shorter loan duration means that he will actually pay thousands of
dollars less in overall interest than a person who has
a long-term fixed rate mortgage. Long-term loans, usually
lasting 30 years, let people make lower monthly payments.
The decreased monthly obligation can make day-to-day
living a little easier for a lot of people.
Home Loan Quotes
| Compare to HELOC Loans
| Compare to
Adjustable Rate
|
|
