For many people, whether first time buyers or not, the prime thought when looking at a fixed rate mortgage is the monthly repayment cost. A large number of couples these days have decided to wait and are buying homes later but they also wish to pay off their mortgage earlier. Although before signing any documentation, there is a great deal to consider.
One fundamental point is to ensure that the interest rate doesn't change during the life of the mortgage. If you are offered a deal that appears to be too good to be true than it probably is. The interest rate remains the same for long term fixed rate mortgages over the life of the loan. If you are someone that wants a loan with a dependable fixed monthly mortgage payment with no hidden supplemental charges then this is the main benefit with this type of arrangement.
Both my wife and I decided to research fixed rate mortgages when we began looking at homes for sale. Although it was important for us to pay off our loan as soon as we could, we didn't need high, unrealistic monthly payments which we would have a problem sustaining.
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. Taking everything into account we finally went for the easier 30 year fixed mortgage rate plan instead.
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.
As such the 30 year fixed mortgage rate brought the monthly repayments down quite a bit. Fortunately, we are also able make supplemental repayments throughout the year to make the principal shrink faster. Just by making a handful of extra repayments throughout a twelve month period you can knock years off of your loan period. This is well worth the effort in the long run but it does require some discipline. Taking our current needs and fiscal abilities into account was more serious than our desire for a shorter term fifteen year fixed mortgage rate program. Altogether though, things worked out very well for us and we're pleased we made the decision we did.
One fundamental point is to ensure that the interest rate doesn't change during the life of the mortgage. If you are offered a deal that appears to be too good to be true than it probably is. The interest rate remains the same for long term fixed rate mortgages over the life of the loan. If you are someone that wants a loan with a dependable fixed monthly mortgage payment with no hidden supplemental charges then this is the main benefit with this type of arrangement.
Both my wife and I decided to research fixed rate mortgages when we began looking at homes for sale. Although it was important for us to pay off our loan as soon as we could, we didn't need high, unrealistic monthly payments which we would have a problem sustaining.
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. Taking everything into account we finally went for the easier 30 year fixed mortgage rate plan instead.
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.
As such the 30 year fixed mortgage rate brought the monthly repayments down quite a bit. Fortunately, we are also able make supplemental repayments throughout the year to make the principal shrink faster. Just by making a handful of extra repayments throughout a twelve month period you can knock years off of your loan period. This is well worth the effort in the long run but it does require some discipline. Taking our current needs and fiscal abilities into account was more serious than our desire for a shorter term fifteen year fixed mortgage rate program. Altogether though, things worked out very well for us and we're pleased we made the decision we did.
Posts
No comments:
Post a Comment