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A Brief Post About Fixed Mortgages

Some fixed-rate mortgages only offer a fixed rate for just one year. This kind of offer may be made to bring in someone who never before would have qualified for a mortgage loan. Adjustable rate mortgages usually start out with a low interest rate, but these “teaser” rates usually don’t last for long. When the fixed interest rate has run its course, the rate goes on to fluctuate in correspondence with the housing market. The unfortunate reality is that this is rarely something to be desired. The major drawback of a fixed mortgage is that when the property value falls due to market trends, it will not be profitable for you. The holder of an adjustable rate mortgage has a payment rate that will be either high or low according to the housing market.

The best part of a fixed mortgage is that your monthly installment is decided in advance. This is great for anyone trying to adhere to a budget, or anyone else where a rise in your monthly mortgage payments would cause problems. Many people fall into the trap of taking on an adjustable rate mortgage when they cannot afford any significant change in their payments. The beauty of a fixed rate mortgage is that there’ll be no guesswork around your monthly payments.

You may have not considered that if you have a fixed mortgage, you don’t have to pay anything extra even if your income increases. This means that you’ll still have a fixed rate mortgage with money left over to spend on whatever you want. Should you opt to pay down your mortgage early, however, you might find yourself subject to unexpected high fees.

For more information about fixed mortgages, be sure to visit the link.

March 25th, 2010

Posted by admin in Real Estate | No Comments »