Information on the Cheapest Fixed Rate Mortgages
Zindy Maseko
For many home buyers, the only real decision they have to make is whether to have a 15 or 30 year fixed mortgage rate? Buying a home later in life means that many people want to have the mortgage paid off early. There are always things to take into account before signing documents. Over the period of the loan, it's important to remember to make sure the interest rate remains the same.
It seems that some lenders are happy to offer deals that appear too good to be true and they usually are. A 15 year fixed rate mortgage means the interest rate remains stable for the life of the loan. If you are someone that wants a loan with a regular fixed repayment and no additional charges then this is the main benefit with this type of agreement. Both my wife and I decided to research fixed rate mortgages when we started looking at homes for sale.
Even though it was important for us to pay off our loan at the earliest possible opportunity, we didn't want high, unrealistic monthly payments which we would have trouble maintaining. It became obvious that we had to look at fixed rate mortgages over a longer period and not just 15 year plans. The problem was that we weren't very happy about having a mortgage close to when we both retired so it was our hope a 15 year fixed mortgage rate would still be available to us. It wasn't easy for us because of the stress to pay the house off early.
After taking everything into consideration we decided on a 30 year loan instead. Many factors were taken into account when reaching this decision. The most important point was the fact I discovered my wife was having a baby. My wife decided she wanted to raise our child at home so I couldn't be certain of her monthly financial commitment to our household expenses. The financial commitment per month on the 15 year fixed mortgage rate was just too high. We just decided we would probably get into trouble if we took this route. The monthly payments on a 30 year loan were quite a bit lower.
Making a few additional lump sum payments during the year helps bring down the amount owed. It is possible to take years off your loan if you can make a few extra payments during each year. Although this isn't easy to achieve, in the long term it is well worth it.
In the long term, this is a strategy well worth pursuing if you are able. Our desire for a 15 year fixed rate mortgage was second place to our more immediate needs. Things worked out well anyway, even though we were unsure about it to start with.
About the Author:
|
