A mortgage whose interest rate does not change for the life of the loan. Your payments also do not change for the life of your loan (principal and interest). Taxes and insurance can vary.
Types of Fixed Rate Mortgages:
- 15-year - A loan with a term of 15 years. Although the monthly payment on a 15-year mortgage is higher than that of a 30-year mortgage, the amount of interest paid over the life of the loan is substantially less.
30-year - A loan with a term of 30 years.
Advantages of using Fixed Rate Mortgages:
- Predictable - The major advantage of a fixed rate mortgage is that it presents a predictable housing costs for the life of the loan. A fixed rate mortgage guarantees that your interest rate stays the same, which means that your monthly principle and interest payments through the entire term of the mortgage remain unchanged. With a fixed rate mortgage, your monthly payments would only increase due to increases in property taxes or insurance rates.
- Budgetable - A fixed rate mortgage allows you to budget accurately and enjoy lasting peace of mind. Knowing that your mortgage payment will remain the same month after month allows you to plan for lifes other pleasures, like vacations, college educations and retirement. It's pretty simple, if you don't like risk, then a fixed rate mortgage is right for you.
- Unaffected by interest changes - Housing cost remains unaffected by interest rate changes and inflation.
No comments:
Post a Comment