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Bob Schwartz
San Diego
real estate broker
Certified
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Getting on a Fixed-Rate Mortgage
The monthly repayments for 30 year or 15 year fixed mortgage are just one
important consideration for many people who are looking to buy a home.
Buying a home later in life means that many people want to have the mortgage
paid off early. In a situation as important as this time needs to be spent
considering all the available options. Probably the most important point is
a guarantee of a constant interest rate for the duration of the loan.
Avoid the mortgage loans offered by some lenders, those that sound
unbelievable because they usually are. Loans agreed with a 15 year fixed
mortgage keep the same interest rate throughout the entire life of the
agreement. For many people with regular incomes, this is a definite benefit
as there are no hidden charges. My wife and I looked into the loans
available with 15 year fixed mortgage rates when we were searching for a
home for sale.
Our aim was to pay of the mortgage as soon as we could without getting into
trouble with high monthly payments. So in consideration of this point we
also looked at longer, 30 year fixed rate mortgages as well. Still, having a
mortgage close to retirement wasn't what we were looking for, so we decided
to try for a loan with a 15 year fixed mortgage. Too much pressure was
placed on the early repayment of the mortgage loan.
Taking everything into account we finally went for the easier 30 year
mortgage plan instead. Reaching the decision we did was the only one that
made sense. Finding out my wife was having a baby made making the choice so
much easier! My wife was going to raise our child from home so her addition
to the monthly income would be restricted. Loans that were based on 15 year
fixed mortgage rates required a much higher monthly payment. For us it just
wasn't feasible as we would just be in over our heads. The monthly payments
on a 30 year loan were quite a bit lower.
If we have spare cash throughout the year then we can use it to reduce the
capital sum. By doing this you can also reduce the term of the mortgage by
quite a few years. In the long term, this is a strategy well worth pursuing
if you are able. Taking our needs and abilities into account was more
important than our desire for a shorter term mortgage plan. As it is, things
worked out very well for us by taking this route.
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