Long term fixed rate mortgages are just one fundamental thought
For many couples, whether first time buyers or not, the prime thought when looking at a fixed rate mortgage is the monthly payment cost. A large number of people these days have decided to wait and are purchasing homes later but they also wish to settle their mortgage earlier. Although before signing any documentation, there is a great deal to consider.
Over the course of the mortgage, it's essential to remember to make sure the interest rate doesn't change. It is always wise to avoid agreements that appear to too good to be true because they invariably are. The interest rate remains the same for long term fixed rate mortgages over the life of the mortgage. There are no hidden surprises which is great for many people that need a set monthly mortgage payment. Both my wife and I decided to explore fixed rate mortgages when we started looking at homes for sale. Although it was fundamental for us to pay off our loan as soon as we could, we didn't need high, unrealistic monthly payments which we would have a problem sustaining.
Looking at an even longer term mortgage was one option if we could not afford the monthly repayments on a 15 year plan. The problem was that we weren't very happy about having a mortgage still running close to when we both retired and hoped that a fifteen year fixed mortgage rate would still be accessible to us. There was obviously very good grounds to finish paying the mortgage off earlier if at all possible.
There were many things that factored into this; first of all, I learned that my wife was having a baby. Because my wife wanted to be at home for our child, her financial income would be uncertain and unreliable. Alas, a higher monthly payment is the downside of loans on a 15 year fixed mortgage rate plan. It was a case that we plainly didn't wish to get in too deep and cause troubles in the future.
Despite the trepidation of having a longer term loan, the 30 years fixed mortgage rate did reduce the monthly installments considerably. During the year, if we have some spare cash, we can make additional repayments which helps to lower the amount owed. Just by making a handful of additional repayments throughout a one year period you can knock years off of your mortgage period.
This is well worth the effort in the long term but it does require some discipline. Under other conditions, we would have preferred to have taken out a loan with a 15 year fixed mortgage rate but we had to consider our other commitments as well. Despite all our worries, things turned out well for us in the end and we don't regret our decision.
Over the course of the mortgage, it's essential to remember to make sure the interest rate doesn't change. It is always wise to avoid agreements that appear to too good to be true because they invariably are. The interest rate remains the same for long term fixed rate mortgages over the life of the mortgage. There are no hidden surprises which is great for many people that need a set monthly mortgage payment. Both my wife and I decided to explore fixed rate mortgages when we started looking at homes for sale. Although it was fundamental for us to pay off our loan as soon as we could, we didn't need high, unrealistic monthly payments which we would have a problem sustaining.
Looking at an even longer term mortgage was one option if we could not afford the monthly repayments on a 15 year plan. The problem was that we weren't very happy about having a mortgage still running close to when we both retired and hoped that a fifteen year fixed mortgage rate would still be accessible to us. There was obviously very good grounds to finish paying the mortgage off earlier if at all possible.
There were many things that factored into this; first of all, I learned that my wife was having a baby. Because my wife wanted to be at home for our child, her financial income would be uncertain and unreliable. Alas, a higher monthly payment is the downside of loans on a 15 year fixed mortgage rate plan. It was a case that we plainly didn't wish to get in too deep and cause troubles in the future.
Despite the trepidation of having a longer term loan, the 30 years fixed mortgage rate did reduce the monthly installments considerably. During the year, if we have some spare cash, we can make additional repayments which helps to lower the amount owed. Just by making a handful of additional repayments throughout a one year period you can knock years off of your mortgage period.
This is well worth the effort in the long term but it does require some discipline. Under other conditions, we would have preferred to have taken out a loan with a 15 year fixed mortgage rate but we had to consider our other commitments as well. Despite all our worries, things turned out well for us in the end and we don't regret our decision.
posted by Credit Counseling at
4:38 AM
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