Understanding the Meaning of Fixed Rate Loans
If you are just thinking about buying your first house, you may be trying to understand the way fixed rate mortgages work. For many people having a fixed rate provides some security because they know their mortgage payments will not go up except when taxes and/or insurance increase. This allows homeowners to easily track the balances on their loans and to more easily meet their budget. Some of the facts about fixed rate loans you may want to know include:
Interest rates never change no matter what happens to the economy
Interest rate is fixed for the entire term of the loan (30 years, 40 years, etc.)
Easier to follow loan balance because of the fixed interest rate
Fixed rate loans are easier for those on fixed incomes to fit into their budgets
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Most people feel safer with fixed rates because they know the interest rate will always remain steady regardless of what the prime rate does. For more information on fixed rate loans and how they compare to ARMs fill out the contact information form on the website. One of the representatives will contact you shortly.
Fixed Rate or ARM: Making the Right Choice for You
In today’s economy potential home buyers have a choice between a fixed rate mortgage and an adjustable rate. There are certainly advantages to both, but most people feel more comfortable with a fixed rate. However, those who don’t plan to stay in the house very long may actually benefit from an ARM because they can make plans to sell or refinance before the lower fixed rate expires and the adjustable rate kicks in.
Advantages of a Fixed Rate Loan
A fixed rates mortgage loan is advantageous in many ways. The most important thing about a fixed rate loan is homeowners never have to worry about the payments going up because of an increase in the interest rate. The payments for principal and interest will remain the same throughout the term of the loan; the only fluctuation will be in the cost of taxes and insurance, items over which they have no control. These types of mortgages make it easier for homeowners to track the balances on their loans, especially those who are looking to make extra principal payments on their loans.
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What is a fixed rate mortgage? Fixed rate mortgages are the most popular mortgages although a fixed rate mortgage may not meet the needs of first time home buyers. A fixed rates mortgage is also an excellent choice for those on fixed incomes, but you still want to compare the fixed and ARM rates before making a decision.
If you’re looking for your first home and considering a fixed rate mortgage, you should take some time to visit www.real-estate-