A fixed-rate mortgage is a mortgage on which the interest rate is set for the term of the loan. Your interest rate stays the same for the term of the mortgage or for a specified period of time. Most people use a fixed-rate mortgage. In fact, about 75 percent of all home mortgages have fixed rates. The main advantage of a fixed-rate mortgage is that you always know exactly how much your mortgage payment will be, and you can plan for it.
A Fixed Rate mortgage will offer you the security of knowing that your mortgage interest rate will not change during the term of your fixed rate. For example, a lender can offer a 30-year fixed loan to a homebuyer at a 6.5% interest rate. The loan is locked in to the 6.5% interest rate, even if the market interest rate rises to 8.0%. Conversely, if the market interest rate decreases to 4.5%, you will continue to pay the 6.5% interest rate. A Fixed-Rate Mortgage applies the same interest rate toward monthly loan payments for the life of the loan.
Features:
- Straightforward and easier to understand than Adjustable Rate Mortgages (ARMs).
- More secure for the buyer and very popular with first-time home buyers.
- Ideal for anyone who likes to budget monthly expenses and plans to keep their home for several years.
- Since the risk to the lender is higher, fixed-rate mortgages generally have higher interest rates than Adjustable Rate Mortgages (ARMs).
- Tend to have higher initial monthly payments compared to those of adjustable rate mortgages.
- Fixed-rate mortgages are less flexibility than adjustable rate mortgages.
With adjustable rate mortgages the interest rate is not fixed, but changes during the life of the loan in line with movements in an index rate. The advantage of an Adjustable Rate Mortgage is that you may be able to afford a more expensive home because your initial interest rate will be lower. In a fixed-rate mortgage, your interest rate stays the same for the term of the mortgage.
Copyright © 2005. Chileshe Mwape writes for The Secured Personal Loans Website at: http://www.secured-personal-loan.org.uk/ and he's also a regular contributor to the Fixed-rate Mortgages blog at http://www.fixed-rate-mortgages.blogspot.com/ a>
This article may be reprinted online as long as all the above links are active and clickable.
What is a "Reverse Mortgage?"Also known as a Home Equity... Read More
What's the most efficient way to secure a US Commercial... Read More
Obtaining a home loan is arguably the most expensive transaction... Read More
Do you know what it takes to qualify for mortgage... Read More
Having a pre-approved mortgage will give you the confidence of... Read More
A home owners' insurance is the cover for the house... Read More
Choosing a home loan has never been tougher. Yes, with... Read More
This article will help you understand the differences between a... Read More
There are numerous reasons a person has bad credit. Late... Read More
If you are wanting to get a home equity loan,... Read More
There are a variety of tools online that you can... Read More
Buying a home, especially for the first time, can be... Read More
Obtaining a home equity loan does not have to be... Read More
One of the biggest reasons homeowners refinance their mortgage is... Read More
Financing and buying a home can help improve your financial... Read More
In previous decades, when a borrower missed a payment on... Read More
Using a home equity loan to get out of debt... Read More
Essentially there is little difference between the process that one... Read More
Every individual needs a home and every home needs an... Read More
Some people in the real estate industry have a terrible... Read More
So you have a mortgage on your home or planning... Read More
There are great mortgage loans for people with poor credit,... Read More
Owing to the popularity of home equity loans, there are... Read More
If bulls and the bears of the stock market have... Read More
The bills are out of control and you need a... Read More
Listed below is a guide to mortgage terms. It is... Read More
A quickly growing trend in lending is the online homeowner... Read More
So, you've decided to buy a house, and you're ready... Read More
California is a beautiful place to live There is no... Read More
Home prices in the Untied States continue to soar, and... Read More
Availability of Home loans is in full bloom. They are... Read More
Home is the place you inhabit. It is the place... Read More
The housing market has exploded, with home prices rising beyond... Read More
The Research Rates of Agri MortgageFirst thing, when finding an... Read More
A commercial mortgage or commercial remortgage is a business loan... Read More
With today's relatively low interest rates and climbing property values,... Read More
As common as mortgages are, there are a surprisingly large... Read More
USA ECONOMIC CONDITIONSToday's sluggish economy has left millions of people... Read More
As a first time home buyer, there are several things... Read More
Having a pre-approved mortgage will give you the confidence of... Read More
If you as an investor understand the process, you will... Read More
Types of UK MortgagesYou may be wasting your money with... Read More
If finances had a copyright, we would have bought it... Read More
Before you start shopping around for a mortgage, you need... Read More
Reverse mortgages used to be considered the last resort of... Read More
If you're looking for a cheap homeowner loan, you might... Read More
If a mortgage could be paid off in five years... Read More
Mortgages have assumed a number of characters from the time... Read More
When choosing the right mortgage company for your home purchase... Read More
Using a home equity loan really depends on what your... Read More
Refinancing your home mortgage can come with some great perks.... Read More
Rising home prices, particularly on the East and West coasts... Read More
Okay, you've decided to buy a home and are trying... Read More
If you have bad credit and are looking to get... Read More
Home buyers are often confused about where to begin in... Read More
Mortgage refinancing is when you take a mortgage of a... Read More
Mortgage lenders have set up shop online, but they aren't... Read More
Well, we did it. We are buying a beautiful, brand... Read More
Are you one of a growing number of people planning... Read More
Refinancing vs line of credit are two popular options you... Read More
Mortgage cycling is a system that relies on solid budgeting,... Read More
Loans are not of a recent origin. People used to... Read More
Most consumers are aware that a history of paying bills... Read More
If you in the process of looking for your first... Read More
Have your home's appreciation grow twice as fast.For Seniors over... Read More
If you watch enough late night television, you'll see advertisements... Read More
Mortgage Refinance |