January 24, 2008

Consumer Handbook On Adjustable Rate Mortgages

When considering their monthly repayments, many people considering buying a home look into 30 year or 15 year fixed mortgage rates. Early completion of a mortgage is important for those of use that leave buying a home until later in life. Although before signing any documents, there are many things to consider.

Over the course of the loan, it’s important to remember to make sure the interest rate doesn’t change. Many lenders offer deals that are too good to be true. The interest rate remains the same for fixed rate mortgages over the life of the loan. For many people with regular incomes, this sis a definite benefit as there are no hidden charges. My husband and I looked into the loans available with 15 year fixed mortgage rates when we were looking at home for sale.

Our aim was to pay of the mortgage as soon as we could without getting into trouble with high monthly payments. This meant that we had to consider 30 year fixed mortgage plans as well as 15 year mortgages.

Consumer Handbook On Adjustable Rate Mortgages...

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 decided on a 30 year loan after looking at all the other possibilities.

There were many things that lead us to this decision, but the main one was that I found out I was having a baby. My regular monthly income would become unreliable because I wanted to be at home raising our child. Our monthly payment would have been too high if we had committed ourselves to the 15 year fixed mortgage plan. All things considered, we just didn’t want to bite off more than we could chew. Despite the trepidation of having a longer term loan, it did reduce the repayments considerably.

Making a few additional lump sum payments during the year helps bring down the amount owed. If you make a handful of extra payments throughout a twelve month period you can knock years off of your loan. Although this isn’t easy to achieve, in the long term it is well worth it. We would have much preferred to have taken out a loan with a 15 year fixed mortgage rate but we had to consider our other commitments as well.

Despite all our worries, things turned out well for us in the end.

Consumer Handbook On Adjustable Rate Mortgages

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