Many couples buying a home are face with the question of whether to opt for a 15 or 30 year fixed mortgage rate. 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. Decisions of this nature need careful consideration before any commitment is made. It is always a good idea to confirm that the interest rate does not alter during the term of the mortgage.
If you are offered a deal that appears to be too good to be true than it probably is. For loans that have 15 year fixed mortgage rates, the same amount of interest is maintained throughout the life of the loan. For those individuals that do not like hidden surprises, this is always a benefit. My wife and I had already decided to research long term fixed mortgage rates when we started looking at homes 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 careful consideration we decided to take the longer term 30 year repayment option instead of the 15 year plan. There were many things that lead us into making this choice.Probably the over-riding decider was the fact my wife was expecting a child. Her regular monthly income would become unreliable because she wanted to be at home raising our child. Unfortunately, a higher monthly payment was the downside for loans with a 15 year fixed mortgage rate. For us it just was not feasible as we would just be in over our heads. The monthly payments on a 30 year loan were quite a bit lower.
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 the decision.
If you are offered a deal that appears to be too good to be true than it probably is. For loans that have 15 year fixed mortgage rates, the same amount of interest is maintained throughout the life of the loan. For those individuals that do not like hidden surprises, this is always a benefit. My wife and I had already decided to research long term fixed mortgage rates when we started looking at homes 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 careful consideration we decided to take the longer term 30 year repayment option instead of the 15 year plan. There were many things that lead us into making this choice.Probably the over-riding decider was the fact my wife was expecting a child. Her regular monthly income would become unreliable because she wanted to be at home raising our child. Unfortunately, a higher monthly payment was the downside for loans with a 15 year fixed mortgage rate. For us it just was not feasible as we would just be in over our heads. The monthly payments on a 30 year loan were quite a bit lower.
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 the decision.
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