January 23, 2008

Best Fixed Rate Interest Only Mortgage

The monthly payments for 30 year or 15 year fixed mortgages are the main considerations for many people who are looking to buy a home. Most people that buy a home later in life want to have the mortgage paid off as soon as possible. However, before you rush in and sign any papers there are points to consider.

Over the course of the loan, it’s important to remember to make sure the interest rate doesn’t change. Avoid the mortgage loans offered by some lenders, the one that sound unbelievable because they usually are. Loans that have 15 year fixed mortgage rates maintain the same amount of interest throughout the life of the loan. If you are someone that wants a loan with a regular fixed repayment and no surprises then this is the main benefit with this type of agreement. My husband and I looked into the loans available with 15 year fixed mortgage rates when we were looking at home for sale.

Although paying off the mortgage was our main priority, we did not want to have monthly payments that were uncomfortably high. In addition to considering loans with 15 year fixed mortgage rates we also looked into loans that spanned 30 years as well.

Best Fixed Rate Interest Only Mortgage...

Because we didn’t still want to have a mortgage when we close to retirement, we hoped we would be able to afford a shorter 15 year fixed rate mortgage. There was obviously very good reasons to finish paying the loan off early. We thought about it long and hard and Despite the pressure we decided to go with the 30 year loan plan.

Although many things were taken into account when reaching this decision, the main one was that I found out I was having a baby. Because I wanted to be at home for our child, my financial income would be uncertain and not regular. Our monthly payment would have been too high if we had committed ourselves to the 15 year fixed mortgage plan. For us it just wasn’t feasible as we would just be in over our heads. We found that the monthly repayments on a 30 year loan were more manageable.

Being able to make additional lump sum payments during the year means the outstanding loan reduces faster. If you make a handful of extra payments throughout a twelve month period you can knock years off of your loan. It may be easier said than done, but does pay off eventually. Our first choice would have been to go for the short term fixed rate mortgage solution but this did not help with our more immediate situation.

Things worked out well anyway.

Best Fixed Rate Interest Only Mortgage

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