Fixed rate mortgages are the preferred choice in America today for many families and for good reason. They desire the ability to feel secure in their homes for a long time while they raise their children and work their steady jobs. This has been the foundation of home ownership for several decades now and is a symbol of the stability of the housing market as a whole.
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This stability has always been the most appealing quality of fixed rate mortgages even during our most recent housing crisis. Contrary to adjustable rate mortgages, the rates will never change for the life of the loan unless you refinance to something else. This means that your monthly payments now will be the same twenty years from now despite what the housing market interest rates are. Here are some other popular qualities in a fixed rate mortgage.
- Most fixed rate mortgages are negotiated to be anywhere from 10-50 years in length. This can change if you refinance over the life of the loan, move, or pay off the principal ahead of schedule. A 30 year mortgage is most common.
- These are very practical mortgages because the borrower is unaffected by the increase of rates around them. However if the interest rates decease it will not affect the borrower either.
- If the interest rates do drop below what they are paying they may be able to refinance on their mortgage to get an even better rate.
How to take advantage of a fixed rate mortgage
Experts in the industry have many strategies for paying off mortgages quickly and helping homeowners save a lot of money in the long run. One such strategy is to make half payments twice a month instead of once a month. This way you could potentially pay off a 30 year mortgage in 22 years saving a ton of interest which would go directly into your pocket! Another sound strategy for working with the fixed rates on your mortgage is to make at least one extra mortgage payment each year. So this would mean 13 mortgage payments each year. This strategy allows a homeowner on average to pay off their home in just 26 years.
FHA programs
The government favors fixed rates for mortgage rates, and many home owners enjoy FHA loans. Veterans also have many home owning advantages in the form of loans from the government. Generally it is a stress free loan. The option to pay less on a 10-15 year loan is appealing and achievable for most home owners and doesn’t involve the complexities and conditions associated with the risk of adjustable rate mortgages.
Weigh your options and make the smart choice
As with any loan there are certain risks involved, but the risks associated with fixed rates are generally more manageable and predictable than adjustable rate mortgages. The key is to know how to plan around the future. Do you plan on living in that particular home for a long time with your current job and family? A fixed rate is a solid investment for raising families. Visit www.real-estate-yogi.com today to learn more about your mortgage options and what might be best suited for your situation. Call them directly at 1-800-987-1397 for a free consultation.
