For borrowers who want a lower payment but are uncomfortable with adjustable rate mortgage (ARM) options, lenders have come up
with fixed rate mortgages with 40 or even 50 year terms.
For years, the 30 year
fixed rate mortgage loan provided a stable and affordable method for buying a home or seeking a mortgage refinance.
As with purchase mortgages, direct lenders offered the best refinancing rates, beating traditional banks by a dozen percentage points on
fixed rate mortgage rates.
As with purchase mortgages, direct lenders offered the best refinancing rates, beating traditional banks by a dozen percentage points
on fixed rate mortgage rates.
However,
as fixed rate mortgages become more expensive, and home prices continue to rise, expect to see ARM rates attract a new following for these loans.
From
conventional fixed rate mortgages to government - backed loans to jumbo financing and more, there's likely a home loan program that will work for your needs and budget.
Generally, you can start to consider 15 or 30 year
fixed rate mortgages if you plan to stay in your home for more than seven years.
If they are also planning on staying in the home for the long haul, experts say a 30 - year
fixed rate mortgage makes the most financial sense.
Consumers across the nation are lining up to lock in low
fixed rate mortgages because they enable homeowners to realize significant savings with lower monthly payments while increasing cash flow.
For instance, a homeowner with an adjustable rate mortgage might want a
new fixed rate mortgage to avoid rising rates.
It provides lower initial payments and a stable final monthly rate, but the final rate may be somewhat higher than on a
standard fixed rate mortgage.
Unlike adjustable rate mortgages, where rates change depending on market conditions,
fixed rate mortgages feature interest rates that stay consistent throughout the lifetime of the loan.
With
most fixed rate mortgages, your monthly principal and interest payment will not change for the term of the loan, regardless of whether interest rates rise or fall.
For this reason, many people will refinance out of an ARM and into a lower
risk fixed rate mortgage with a stable monthly payment over the life of the loan.
In the past week I've received a couple emails from readers asking why I listed some reasons to avoid a 5 year
fixed rate mortgage when rates could rise in the future.
The first borrower may find a five year adjustable rate mortgage the best option, while the second borrower may realize a 15 year low
fixed rate mortgage matches her needs best.
Lenders follow this market intensely because as the yields of bonds go up and down,
fixed rate mortgages do approximately the same thing.
Fixed rate mortgages carry the same interest rate for the entire life of the mortgage, and can protect buyers from sharp spikes in interest rates.
Save money with a low
fixed rate mortgage solution that is available when refinancing adjustable rate loans that offer cash back for consolidating bills.
Fixed rate mortgages often appeal to clients who want stability in their payments, manage a tight monthly budget, or are generally more conservative.
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