Home Loans -- The Hot New Product? The 30-year, Fixed-rate Mortgage

In recent years, the mortgage industry has introduced dozens of new types of loans. The needs of every borrower are different, so the mortgage companies have tried to come up with an answer for every problem. They've introduced 40-year mortgages, promoted 15-year mortgages, and introduced the wildest array of variable-rate mortgages imaginable. There are mortgages that have interest rates that adjust every few months, every few years, or just once. A recently popular product that thrives on the East and West coasts is the interest-only mortgage, which reduces payments by not requiring payment on the loan's principal for the first few years of the loan. The prospective homebuyer could have as many as one hundred possible types of loans to choose from when searching for a mortgage. Amidst this huge array of loan types, one type is growing in popularity faster than all the rest, and it may surprise you. The fastest-growing type of mortgage in America right now is the traditional 30-year, fixed-rate loan. Last year, only about 35% of all borrowers took out a 30 year, fixed-rate loan, but so far this year, the rate has increased to nearly 50%.

This may seem odd, as most everyone has been opting for adjustable-rate mortgages for the last few years. Adjustable rate mortgages tend to offer lower interest rates, and lower interest rates mean lower payments. These loans have been popular with buyers who move often, have lower incomes or buyers who simply want to invest their money elsewhere. So why is the 30-year fixed-rate mortgage back in style? Because interest rates have dropped to their lowest point in fourteen months, and they are nearly as low as they were in the summer of 2003, when they reached the lowest point on record. In short, the 30-year fixed-rate mortgage is not only seen as competitive with other types of loans, but it is actually seen as safer. Borrowers who have adjustable-rate mortgages enjoy their biggest advantage when rates are high, knowing that their interest rate is lower than a fixed-rate mortgage. But when interest rates for the market as a whole reach historic lows, the borrower with an adjustable-rate mortgage knows that their rate can only go up. At times like the present, when rates are only likely to go up, converting an adjustable rate loan to a fixed-rate loan is a smart move. First-time buyers can safely take on a 30-year fixed-rate loan and be comfortable in the fact that their rate will stay fairly low for the duration of their loan.

Sometimes, the way things have always been done turns out to be the best. While there are still some buyers who will benefit from adjustable-rate loans, most borrowers would do well to lock in their loan at a fixed rate now. Historically, fixed-rate mortgages have rarely been under six percent, so obtaining such a loan while they are available is one of the smartest moves a homeowner can make.

©Copyright 2005 by Retro Marketing.

Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a Website devoted to debt consolidation information and HomeEquityHelp.net, a site devoted to information on home equity loans.

---

Refinancing Your Home Mortgage Loan

You're considering refinancing your home mortgage loan to save money.... Read More

Bridging Loan Basics

A Bridging Loan is a short-term loan used as a... Read More

Taking the Time to Find the Best Home Improvement Loans

The best home improvement loans usually aren't going to be... Read More

What is a Self-Employed Mortgage?

Self-employed mortgages, as the term implies are mortgages designed for... Read More

Where To Find The Best Rates For Your Mortgage?

As with all of my articles this will be based... Read More

Mortgage Soup

Looking for home mortgage loans can get confusing with the... Read More

Fixed Versus Adjustable Rate Mortgages

Which One Should You Choose?Choosing between a fixed rate loan... Read More

How to Get the Best Mortgage

This is a guide on how to get the best... Read More

Home Loans ? Repair Credit Errors in Three Days!

Most consumers are aware that a history of paying bills... Read More

Bad Credit History? How Financing and Buying a Home Can Help You Improve Your Financial Situation

Financing and buying a home can help improve your financial... Read More

Refinancing vs Line of Credit

Refinancing vs line of credit are two popular options you... Read More

Bad Credit Home Financing - Get The Mortgage Loan You Want Even With Poor Credit

Having poor credit alone cannot hold you back from getting... Read More

Homebuyers Loan Guide

If you are a homebuyer, there are a few points... Read More

Mortgages After Bankruptcy: Easier Than You Would Expect

Give yourself time to rebound. Whether you had to turn... Read More

Repayment Remortgages is The Cure For Outdated Endowment Policy

If bulls and the bears of the stock market have... Read More

A Guide to Getting a Home Improvement Loan

If you've got a few things around the house that... Read More

Why Its Important to Get Pre-Approved

Having a pre-approved mortgage will give you the confidence of... Read More

Which is Better? Fixed-Rate or Adjustable-Rate Mortgages

The answer depends on several factors including your financial situation.... Read More

Foreclosure Scams To Be Aware Of

Homeowners facing foreclosure should be aware of unscrupulous lenders and... Read More

Gearing Up for Bad Credit Mortgages

Mortgage would have never happened, had mortgages been a no... Read More

Refinance Home Loan and Refinance Home Loans

Refinance home loan lenders are eager to lend money to... Read More

What is a Flexible Mortgage?

'Flexible mortgage' is a term that's used a lot, but... Read More

Fees Paid To Brokers By Mortgage Lenders Are Far Too High

Procuration fees paid by some sub-prime lenders are too high.Fact.There... Read More

A Guide to the Best Remortgage Deals

Finding the best remortgage deals isn't always easy, especially with... Read More

How to Avoid Paying Mortgage Insurance

In today's world, a borrower should not be paying mortgage... Read More

A Guide to Direct Homeowner Loans

Are you considering applying for direct homeowner loans? Perhaps you're... Read More

Doing a California Refinance Online

Californians are passionate people. I know. I have lived in... Read More

Sub-Prime Mortgage Loans - Things You Should Know About Sub-Prime Mortgages

Sub-prime mortgages are not that much different from average mortgages.... Read More

What is an Offset Mortgage?

An offset mortgage is very similar to a current account... Read More

First-time House Buyers: to Buy or Not to Buy; that is the Question

Buying your first house is always a difficult time. There... Read More

Remortgage To Release Equity By Improving Interest Rate

You have been paying on your mortgage for quite sometime... Read More

Fixed Rate or Adjustable?

Fixed rate or adjustable rate mortgages are two choices of... Read More

Renters Have Much to Gain by Pursuing Home Ownership

Buying a home vs. renting is a big decision that... Read More