This article discusses how a fixed rate mortgage can assist you in planning your finance over the next few years. A fixed rate mortgage can help you to get rid of financial worries associates with mortgage payments as the payment you make is fixed over a number of years As the interest rate that you are charged for a mortgage remains the same for a fixed amount of time. Thus, your budgeting becomes very easy since you can easily plan by knowing exactly how much your monthly repayment will be. These mortgages are brilliant especially for people who have steady jobs. Many graduates apply for fixed rate mortgages when buying their first home. They have a clear idea of how much money to pay for a period of time. They can accordingly formulate a budget that suits their needs and circumstances. Many reputed lenders help people buy their first home or remortgage from their existing l mortgage lender. They arrange fixed rate mortgages that are specific to each client so that their clients can easily meet their financial obligations. It is important to understand that each one of us faces different circumstances and have different needs. Therefore, the experts work out suitable range of fixed rate of mortgages for the customers. Qualified mortgage professionals can guide you with their expertise in deciding the best fixed rate mortgage plan available for you. Fixed rate mortgages are helpful especially for the first time buyers or those who are looking for some stability by working out some fixed monthly repayments. Where other mortgages may increase depending on the base rate, you can rest assured that with a fixed rate you know the precise amount which you will be repaying on a month-to-month basis. This is irrespective of any change in the interest rates since fixed rate mortgages are unaffected by them.
30-year Fixed Rate Wins “Most Popular”
With a 30-year fixed-rate mortgage, your interest rate is locked in for 30 years, providing long-term financial security
Most of America’s homebuyers choose the 30-year fixed-rate mortgage
If you have a fixed-rate mortgage and rates drop, your rate will not change unless you consider refinancing
Of all of the mortgage products out there, the 30–year, fixed–rate mortgage reigns as the most popular. It’s been the favorite for years for several reasons:
- With a longer–term mortgage, monthly payments are smaller, making them more affordable.
- You pay the same amount every month for the life of the loan. You won’t experience the financial shock that many homeowners feel when the interest rates on their adjustable-rate mortgages (ARMs) are reset. For example, some homebuyers who took out certain types of ARMs during the housing boom had their monthly payments skyrocket as much as 165% after the reset a few years later. And many people had trouble refinancing ARMs.
- You can refinance or pay off the mortgage at any time without penalty.
The 30–year, fixed–rate mortgage not only helps make homeownership possible and sustainable for more people, but also helps keep communities stable. Some proof: During the recent economic crisis, home prices fell the least in markets where the most borrowers took out fixed–rate mortgages.
- Fixed-rate mortgages can provide you with affordability, stability and flexibility
- Nearly 90% of today’s homebuyers choose the 30-year fixed-rate mortgage
- Fixed-rate mortgages with 15-year terms will have higher monthly payments, but you’ll build equity much faster