For many people, whether first time buyers or not, the prime thought when looking at a fixed rate mortgage is the monthly payment cost. Buying a home later in life means that many people wish to have the mortgage payed off earlier. Although before signing any papers, there is a great deal to consider.
Over the course of the mortgage, it’s serious to recall to make sure the rate of interest doesn’t change. If you are offered a deal that appears to be too good to be true than it in all probability is. The rate of interest remains the same for long term fixed rate mortgages over the life of the mortgage. If you are someone that wants a loan with a dependable fixed monthly mortgage payment with no hidden extra 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 started looking at homes for sale. Although it was fundamental for us to settle our mortgage as soon as we could, we didn’t wish high, unrealistic monthly repayments which we would have a problem maintaining.
In addition to considering loans for a long run, 15 year fixed mortgage rate we also looked into loans that spanned 30 years as well. No-one likes the idea of having a mortgage when they are close to retiring, and we were no other, so it was still our hope that a 15 year fixed mortgage rate would still be an option. There was obviously very good grounds to finish paying the loan off earlier if at all possible. After learning out my wife was having a baby, reaching the decision we did was the only one that made long term sense. Because my wife wanted to raise our child at home we couldn’t be certain of her monthly financial donation to our family spending. The trouble we could see was the increased fiscal commitment with a higher monthly repayment if we had opted for the shorter fifteen year fixed rate mortgage. For us it just wasn’t feasible as we would just be in over our heads and likely be worrying about money every month.
Despite the trepidation of having a extended term mortgage, the thirty years fixed mortgage rate did reduce the monthly repayments considerably. Also, where possible, making a few additional lump sum repayments during the year helps bring down the sum owed. Just by making a handful of supplemental installments throughout a twelve month period you can knock years off of your loan period. Although this isn’t easy to achieve, in the long term it is well worth it. Although we would have much preferred the loan for a 15 fixed mortgage rate we had to take our needs and fiscal capabilities into consideration. On the whole though, things worked out very well for us and we’re pleased we made the decision we did.