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A Brief Commercial Mortgage Guide
Commercial mortgage loans are used when purchasing structures such as office buildings, apartment complexes, health care facilities and retail outlets. Whether it’s a hi-rise tower or a family-owned restaurant, buyers typically need additional...
Home Mortgage Loan Information - Which Type of Home Loan is Best For You?
If you are considering buying a home, then you may be more than a little confused by all of the terms you hear about home loans. After all, lenders throw around words like fixed rate, balloon mortgages and adjustable rate mortgages without a...
Looking for a Mortgage? Know Your Options.
Buying a new home is an exciting time in everyone’s life, but it can also be one of the most stressful. Unless you have done it before, it is important to know your options when selecting a mortgage. There are multiple choices when choosing the...
Sub-Prime Mortgage Company - 4 Signs Of A Predatory Sub-prime Lender
If you have bad credit and are looking to get a home loan, odds are, you are going to be applying with a subprime lender. Subprime lenders specialize in financing for people with poor credit history or "less than perfect credit".
Getting a...
Think You Can’t Get a Mortgage?
You've finally found that dream home that you have always been searching for, but you are afraid to apply for a mortgage because you have bad credit or less than perfect credit.
Before you give up entirely, there are many mortgage programs that...
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Fixed Rate Mortgage Loans - Understand the Pros and Cons of the Fixed Rate Mortgage
There are many benefits and drawbacks to consider when deciding if a fixed rate mortgage is right for you. It is important to look at all options when it comes to something as important as getting a mortgage for your new home.
There are a few benefits to fixed rate mortgages. One benefit is that the rates and payments remain constant. There won’t be any surprises even if inflation surges out of control and mortgage rates head to 20%. This kind of stability makes budgeting easier. People can manage their money with more certainty because their housing expenses won’t change. Fixed rate mortgages are simple to understand making them appealing and good for first time buyers. Also longer term fixed rate mortgages are very affordable.
There are also a few drawbacks to fixed rate mortgages. To take advantage of falling rates, mortgage holders would have to refinance. That can mean a few thousand dollars in closing costs, another trip to the title company’s office and several hours spent digging up tax forms, bank statements etc. Fixed rate mortgages can be too expensive for some borrowers, especially in high rate environments, because there is no early on payment and
rate break like there is with adjustable rate mortgages. Fixed rate mortgages are practically identical from lender to lender. While lenders keep many adjustable rate mortgages on their books, most financial institutions sell their fixed rate mortgages.
There are a few other important questions you should make sure you have answers to when deciding which type of mortgage is better for you. How long do you plan on staying in the home? How frequently does the adjustable rate mortgage adjust, and when is the adjustment made? What’s the interest rate environment like? Could you still afford your monthly payment if interest rates rise significantly? Do you know the main pros and cons for each type of loan?
Generally, fixed-rate mortgages are a safer way for first time home buyers to get a mortgage. There is greater stability and less risk involved. It is easy to budget and regulate your expenses when you know exactly what your interest rate will be.
About the Author
Carrie Reeder is the owner of ABC Loan Guide. It is an informational loan website, with informative articles and the latest finance news.
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