Long term fixed rate mortgages are just one fundamental thought
The monthly payment for long term fixed rate mortgages are just one fundamental thought for many individuals who are looking to purchase a home. A large number of couples these days have decided to wait and are buying homes later but they also want to pay off their mortgage early. Although before signing any documentation, there is a great deal to consider.
Over the course of the mortgage, it's fundamental to remember to make sure the rate of interest doesn't change. It is always wise to avoid arrangements that seem 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 loan. There are no hidden surprises which is great for many people that wish a dependable monthly mortgage payment. When we were looking to buy a home, my wife and I decided to go for a loan with a fixed rate mortgage. We wanted to pay off the house as soon as practicable but didn't wish to get in over our heads with high monthly repayments.
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.
After looking at the much lower sum of money we would be making on our regular installments with a 30 year fixed rate mortgage, there wasn't any option but to go with it. Also, where possible, making a few additional lump sum payments during the year helps bring down the sum owed. By making just a few of these extra payments each year we discovered that year's could be taken off the mortgage term.
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 fundamental to remember to make sure the rate of interest doesn't change. It is always wise to avoid arrangements that seem 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 loan. There are no hidden surprises which is great for many people that wish a dependable monthly mortgage payment. When we were looking to buy a home, my wife and I decided to go for a loan with a fixed rate mortgage. We wanted to pay off the house as soon as practicable but didn't wish to get in over our heads with high monthly repayments.
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.
After looking at the much lower sum of money we would be making on our regular installments with a 30 year fixed rate mortgage, there wasn't any option but to go with it. Also, where possible, making a few additional lump sum payments during the year helps bring down the sum owed. By making just a few of these extra payments each year we discovered that year's could be taken off the mortgage term.
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
4:23 PM
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