I Want a Fixed Mortgage Heres Why
Of all the loan products that are available here are a few tips (possibly opinionated tips) on what loans you should be looking at for your new home or refinance.
Security: Let it be a lesson for us who have bought a home with money down and got into an adjustable rate mortgage that was fixed for a teaser period of 3 to 7 years. There are no guarantees in life and especially right now in the real estate market. Many homeowners home values have plummeted and left them with loans that will adjust and leave them unable to refinance into another fixed loan. Like I have said before your mortgage will most likely be the biggest financial obligation of your lifetime. Play it safe!
Cheap money: The current mortgage market has great rates right now. Fixed products have been below adjustable rate products to promote better lending and a more stabile economy moving forward. Rates are lower than they have been in years so it is a great time to take advantage of some great deals.
Protection Against Market Swings: As we are seeing right now the market is in a tail spin. A mortgage that has a 30 year term is a long term investment. History has proven that good things come those who wait. NO matter when you buy property; if you wait long enough you will make money. Be prudent in your decision to ensure you are in a loan that is fixed for the entire length of the loan term so you are protected against market swings. Even if your plan is to stay in the house for 5 years when you get your loan by getting something fixed that you can afford you have a built in safety net if things change 4 or 5 years later and you need to keep you current loan.
Paying off Your Principal Balance: If you were the habit of refinancing every few years it may be time to get into something you really like and stick with it. The simple reason. Mortgage interest is front loaded. What that means, simply put, is that you pay the majority of your interest to your mortgage lender in the first few years of your loan. Mortgage interest is not evenly distributed throughout the life of your loan. If you have a fixed rate mortgage you will not have to worry about refinancing down the line after years of frontloaded interest and you can work towards building equity and owning your home free and clear.
There are a few independent instances when a fixed rate mortgage may not be the best option for you. Those instances are very few and far between so sticking with this mindset when you are investing in real estate will cover you in any market situation.
Make your home a fun investment. Borrower safe!
Security: Let it be a lesson for us who have bought a home with money down and got into an adjustable rate mortgage that was fixed for a teaser period of 3 to 7 years. There are no guarantees in life and especially right now in the real estate market. Many homeowners home values have plummeted and left them with loans that will adjust and leave them unable to refinance into another fixed loan. Like I have said before your mortgage will most likely be the biggest financial obligation of your lifetime. Play it safe!
Cheap money: The current mortgage market has great rates right now. Fixed products have been below adjustable rate products to promote better lending and a more stabile economy moving forward. Rates are lower than they have been in years so it is a great time to take advantage of some great deals.
Protection Against Market Swings: As we are seeing right now the market is in a tail spin. A mortgage that has a 30 year term is a long term investment. History has proven that good things come those who wait. NO matter when you buy property; if you wait long enough you will make money. Be prudent in your decision to ensure you are in a loan that is fixed for the entire length of the loan term so you are protected against market swings. Even if your plan is to stay in the house for 5 years when you get your loan by getting something fixed that you can afford you have a built in safety net if things change 4 or 5 years later and you need to keep you current loan.
Paying off Your Principal Balance: If you were the habit of refinancing every few years it may be time to get into something you really like and stick with it. The simple reason. Mortgage interest is front loaded. What that means, simply put, is that you pay the majority of your interest to your mortgage lender in the first few years of your loan. Mortgage interest is not evenly distributed throughout the life of your loan. If you have a fixed rate mortgage you will not have to worry about refinancing down the line after years of frontloaded interest and you can work towards building equity and owning your home free and clear.
There are a few independent instances when a fixed rate mortgage may not be the best option for you. Those instances are very few and far between so sticking with this mindset when you are investing in real estate will cover you in any market situation.
Make your home a fun investment. Borrower safe!
About the Author:
The Mortgage Wizard writes informative articles about the mortgage industry to give you tips on financing. Check out some mortgage companies to find out about today's fixed rate mortgages.
posted by Debt Consolidation Loan at
11:23 AM
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