Want to Know More About Fixed Mortgages?
Posted on February 28th, 2010 by admin
Probably the most common kind of mortgage is the one with a fixed rate. fixed mortgages that last anywhere from one to thirty years offer the greatest degree of financial security to many families. However, while there are many clear advantages to a fixed mortgage, there are also a few disadvantages that you should keep in mind. Knowing the ins and outs of a fixed mortgage will help you decide whether such is right for your particular wants and needs.
Residential loans which provide the same interest rate for a predetermined term are referred to as “fixed mortgages.” They are usually either 15 year mortgages or 30 year mortgages. A 30 year fixed mortgage will provide you with more money left over each month than a 15 year mortgage. But the more years you have the mortgage, the more years you’ll spend repaying the money with interest. With a longer mortgage term, you’ll be paying much more interest over the life of the loan.
There are some fixed mortgages that only offer a fixed rate for up to 12 months. These are typically offers designed to attract new customers who would otherwise have difficulty qualifying for a mortgage. The interest rate is usually quite low to start with but this “teaser rate” does not last long. After the expiration date of the interest rate occurs, your rate can go up and down as the housing market fluctuates. Sad to say, that’s not always what you want to have happen. Of course the disadvantage to a fixed mortgage is that when the housing market lowers its prices, you will not benefit from a lower rate. If you have an adjustable rate mortgage, the current economic status of the housing market will highly influence rate figures.