How To Get The Cheapest Fixed Rate Mortgage
How To Get The Cheapest Fixed Rate Mortgage
The question of which is preferable: the 15 or 30 year fixed mortgage rate is one that home buyers are always unsure about. No-one wants a mortgage hanging around their neck forever but with home buyers entering the market later, an early repayment of this loan is important. Although before signing any documents, there are many things to consider. It is important to make sure that the interest rate doesn’t change over the course of the loan.
Avoid the mortgage loans offered by some lenders, those that sound unbelievable because they usually are. The interest rate should remain the same for fixed rate mortgages until the loan is repaid. 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.
It was always our intention to clear our mortgage debt as early as we could but we didn’t want to over extend ourselves at the same time. So in consideration of this point we also looked at longer, 30 year fixed rate mortgages as well. No-one likes the idea of having a mortgage when they are close to retirement, and we were no different, so it was still our hope that a 15 year fixed mortgage rate plan would still be an option. We were worried about the emphasis placed on early completion of the mortgage.
After taking everything into consideration we decided on a 30 year loan instead. Although a number of things had to be pondered over, eventually the choice was made for us. 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 problem we could see was the increased financial commitment on a monthly basis if we had opted for the 15 year fixed mortgage rate. We just simply didn’t want to get in over our heads with a higher monthly payment. Despite the trepidation of having a longer term loan, it did reduce the repayments considerably.
Making a few additional lump sum payments during the year helps bring down the amount owed. My making just a few of these payments each year we discovered that a number of years could be taken off the mortgage term. It may be easier said than done, but this approach does pay off eventually. Taking our needs and abilities into account was more important than our desire for a shorter term mortgage plan. Things worked out well anyway, even though we were unsure about it to start with.
