Tips On Finding The Right Fixed Rate Mortgage

by James Redder

There is always a debate when home buyers have to decide on the merits of 15 or 30 year fixed mortgage rates. Many people wait until they are older before taking on the responsibility of a mortgage so an early payment of this large debt is an important issue to think about. In a situation as important as this time needs to be spent considering all the available options. Home buyers looking into this need to be assured their monthly payments will not increase.

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 purchase a home, my wife and I decided to go for a loan with a 15 year fixed mortgage rate.

Even though it was important for us to pay off our loan at the earliest possible opportunity, we didn’t want high, unrealistic monthly payments which we would have trouble maintaining. Considering longer term fixed rate mortgages was one option if we could not afford a 15 year plan. We didn’t really like the prospect of having a mortgage as we approached retirement so were really hoping to get one of the loans with 15 year fixed mortgage rates. We felt that there was a great deal of emphasis on paying the mortgage off early.

Taking everything into account we finally went for the easier 30 year mortgage plan instead. There were many things that lead us into making this choice. It was easier reaching this conclusion when I learnt my wife was anticipating a baby. 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’d opted for the 15 year fixed mortgage rate. We just decided we would probably get into trouble if we took this route. Despite the trepidation of having a longer term loan, it did reduce the repayments considerably.

If we’ve spare cash throughout the year then we have the ability to 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 might be easier stated than done, but this approach does pay off eventually. Even though we would have much preferred a loan with a 15 year fixed mortgage rate we’d to take our needs and abilities into consideration. Anyway, everything worked out fine despite our hesitancy.

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