A Look at the Cheapest Fixed Rate Mortgages
By Gugu Martini
Considering whether you need a 30 or 15 year fixed mortgage
rate is important for people looking to buy a home and
concerned about their monthly payments. Many of us are
buying homes later in life these days so it is not
unreasonable to have the house paid off early. There are
always things to take into account before signing documents.
It is always a good idea to confirm that the interest rate
does not alter during the term of the mortgage.
Steer clear of lenders that are offering unbelievable deals
because they probably are. Loans agreed with a 15 year fixed
mortgage keep the same interest rate throughout the entire
life of the agreement. For those individuals that do not
like hidden surprises, this is always a benefit. My wife and
I looked into the loans available with 15 year fixed
mortgage rates when we were searching for a home for sale.
Even though it was important for us to pay off our loan at
the earliest possible opportunity, we did not want high,
unrealistic monthly payments which we would have trouble
maintaining. It became obvious that we had to look at fixed
rate mortgages over a longer period and not just 15 year
plans. We did not 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 were worried about the emphasis placed on early
completion of the mortgage.
After taking everything into consideration we decided on a
30 year loan instead. There were many things that factored
into this decision.The main reason was that I found out my
wife was pregnant. My wife was going to raise our child from
home so her addition to the monthly income would be
restricted. Our monthly payment would have been too high if
we had committed ourselves to the 15 year fixed mortgage
plan. We could see the financial problem of getting in too
deep even though there were benefits to a shorter loan
period. Despite the trepidation of having a longer term
loan, it did reduce the repayments considerably.
Being able to make additional lump sum payments during the
year means the outstanding loan reduces faster. My making
just a few of these payments each year we discovered that a
number of years could be taken off the mortgage term. This
is well worth it in the long term but it does require some
discipline. Our first choice would have been to go for the
short term 15 year fixed rate mortgage solution but this did
not help with our more immediate situation. Despite all our
worries, things turned out well for us and we do not regret
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