Fixed rate mortgages are the most common type of mortgage loan for home buyers. With predictable payments, long term homeowners can plan their budgets and guard against rising interest rates. But a fixed rate mortgage is not for everyone with its higher interest rates and a reduction in your buying power.
Fixed Rate Mortgage Features
A fixed rate mortgage features set rates, long term low monthly payments, and low risk. Interest rates are determined during your loan application process. Rates are set by the market. You can also lower your interest rate by paying points up front. This option only makes sense if you stay in your home for several years.
Long term low monthly payments are another benefit of this type of home loan. Over time, inflation will raise the price of everything except your mortgage payment. As your salary increases, your mortgage costs will also take a smaller percent of your income.
The low risk of fixed interest rates also appeals to borrowers. You dont have to worry about rising interest rates or a balloon payment. You can also repay your loan early, saving money on interest payments.
Mortgage...
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