Tips On Choosing A Fixed Rate Mortgage
The monthly repayments for 30 year or 15 year fixed mortgage are just one important consideration for many people who are looking to buy a home. Many of us are buying homes later in life these days so it is not unreasonable to have the house paid off early. Although before signing any documents, there are many things to consider. One important point is to ensure that the interest rate doesn't change during the life of the loan.
It is always wise to avoid agreements that do not appear to have any negative aspects because they invariably have but are hidden. The interest rate should remain the same for fixed rate mortgages until the loan is repaid. This is always a good thing for those people that don't like surprises. When we were looking to buy a home, my wife and I decided to go for a loan with a 15 year fixed mortgage rate.
Having a realistic, sustainable monthly payment on our mortgage was important even though we wanted to pay off our debt as soon as possible. This meant we had to consider 30 year fixed rate mortgage plans as well as those of 15 years. 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. We felt that there was a great deal of emphasis on paying the mortgage off early.
We thought about it long and hard and despite the pressure we decided to go with the 30 year loan plan. Although a number of things had to be pondered over, eventually the choice was made for us. Discovering my wife was having a baby was the most important reason. 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 knew that it just wasn't an option and the risk was too great. Despite the trepidation of having a longer term loan, it did reduce the repayments considerably.
If we have spare cash throughout the year then we can use it to reduce the capital sum. If you make a handful of extra payments throughout a twelve month period you can knock years off of your loan. It may be easier said than done, but this approach does pay off eventually. Although we would have much preferred a loan with a 15 year fixed mortgage rate we had to take our needs and abilities into consideration. Anyway, everything worked out fine despite our hesitancy.
It is always wise to avoid agreements that do not appear to have any negative aspects because they invariably have but are hidden. The interest rate should remain the same for fixed rate mortgages until the loan is repaid. This is always a good thing for those people that don't like surprises. When we were looking to buy a home, my wife and I decided to go for a loan with a 15 year fixed mortgage rate.
Having a realistic, sustainable monthly payment on our mortgage was important even though we wanted to pay off our debt as soon as possible. This meant we had to consider 30 year fixed rate mortgage plans as well as those of 15 years. 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. We felt that there was a great deal of emphasis on paying the mortgage off early.
We thought about it long and hard and despite the pressure we decided to go with the 30 year loan plan. Although a number of things had to be pondered over, eventually the choice was made for us. Discovering my wife was having a baby was the most important reason. 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 knew that it just wasn't an option and the risk was too great. Despite the trepidation of having a longer term loan, it did reduce the repayments considerably.
If we have spare cash throughout the year then we can use it to reduce the capital sum. If you make a handful of extra payments throughout a twelve month period you can knock years off of your loan. It may be easier said than done, but this approach does pay off eventually. Although we would have much preferred a loan with a 15 year fixed mortgage rate we had to take our needs and abilities into consideration. Anyway, everything worked out fine despite our hesitancy.
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