February 6, 2008

Mortgage Interest Rates On Refinance

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.

It is important to remember that you want to make sure that the interest rate doesn’t change over the course of the loan. Many lenders offer deals that are too good to be true. Loans that have 15 year fixed mortgage rates maintain the same amount of interest throughout the life of the loan. This is always a good thing for those of us that don’t like surprises. 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. This meant that we had to consider 30 year fixed mortgage plans as well as 15 year mortgages.

Mortgage Interest Rates On Refinance...

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. We felt that there was a great deal of pressure to pay the mortgage off early. After careful consideration we decided to take the longer term 30 year repayment option instead of the 15 year plan.

There were many things that lead us to this decision, but the main one was that I found out I was having a baby. I was going to raise our child from home so my contribution to the monthly income would be unreliable. 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. Despite the trepidation of having a longer term loan, it did reduce the repayments considerably.

During the year we can make additional payments which helps to reduce the amount owed. To our surprise we also discovered that we could knock years off our loan by doing this. Difficult this may be, but well worth the effort in the long run. Our desire for a 15 year fixed rate mortgage came second place to our more immediate needs.

But in retrospect, everything worked out ok in the end.

Mortgage Interest Rates On Refinance

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