Fixed Rate Mortgage What You Should Know

The question of which is preferable: the 15 or 30 year fixed mortgage rate is one that home buyers are always unsure about. Buying a home later in life means that many people want to have the mortgage paid off early. It may take some time to reach a decision as there are many things to contemplate. It is always a good idea to confirm that the interest rate does not alter during the term of the mortgage.

It seems that some lenders are happy to offer deals that appear too good to be true and they usually are. Interest rates remain the same throughout the life of the loan for 15 year fixed rate mortgages. For many people with regular incomes, this is a definite benefit as there are no hidden charges. 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 didn’t want high, unrealistic monthly payments which we would have trouble maintaining. Considering longer term fixed rate mortgages was one option if we could not afford a 15 year plan. Still, having a mortgage close to retirement wasn’t what we were looking for, so we decided to try for a loan with a 15 year fixed mortgage. We felt that there was a great deal of emphasis on paying the mortgage off early.

After taking everything into consideration we decided on a 30 year loan instead. There were many things that factored into this decision. The most important point was the fact I discovered my wife was having a baby. Her regular monthly income would become unreliable because she wanted to be at home raising our child. The financial commitment per month on the 15 year fixed mortgage rate was just too high. We knew that it just wasn’t an option and the risk was too great. We found that the monthly repayments on a 30 year loan were more manageable.

We are also able to make extra payments throughout the year to make the principal shrink quicker. To our surprise we also discovered that we could knock years off our loan by doing this. It may be easier said than done, but this approach does pay off eventually. Although we would have much preferred a loan with a 15 year fixed mortgage rate we had to take our needs and abilities into consideration. Anyway, everything worked out fine despite our hesitancy.