3 Things To Know About Fixed-Rate Mortgages

When you decide that you want to purchase a house, where do you turn first? Some people turn to real estate agents, but the place to turn is to a mortgage lender. A lender is an entity that offers the mortgage loan you need to buy a home, and you must get approved for a loan before shopping for a house to buy. As you begin considering your mortgage options, you might want to consider a fixed-rate loan. Here are three things to know about fixed-rate mortgages.

1. The Rate Never Changes

The primary benefit of a fixed-rate mortgage is that you get a loan with a rate that never changes. If you choose a 30-year loan with a fixed-rate, your interest rate will be the same today, tomorrow, and 30 years from now. It does not ever change. As a result, you can have predictable mortgage payments for the duration of your loan. When you initially take the loan, you will learn your monthly mortgage payment. This payment will remain the same for as long as you have the loan. You can choose from other durations besides 30 years, including 15, 20, or 40-year loans.

2. Fixed-Rate Loans Are Not Always the Cheapest Mortgages

The second thing to know about fixed-rate mortgages is that they are not always the cheapest mortgages. If you want the cheapest mortgage, you might want to get an adjustable-rate mortgage. The downside to this option is that the interest rate can change. In fact, the interest rate will likely change after five or seven years, depending on the loan. The benefit, though, is that you might start with a lower rate when you first take the loan.

3. You Might Have the Opportunity to Buy Points

The other thing to know is that you can talk to your lender about buying points with a fixed-rate loan. Buying points provides a way to buy into a lower interest rate, but you must pay cash for the points. If you pay the cash needed for the points, you get a lower rate that you can lock in for the entire duration of the loan, resulting in paying less interest.

Are you interested in a fixed-rate loan? Would you like to explore all your options with loans? If you would like more information about fixed-rate mortgage or other options, contact a lender of your choice today to learn more.

About Me

financing a family swimming pool

Last summer, my family struggled to stay cool during the summer. We seemed to be trapped inside because when we left the air conditioned comfort of the indoors, we were immediately uncomfortable. I promised my kids that this year would be better because I was going to find the money to buy a pool for our yard. I have spent months looking into my different financing options to find out what would be the most affordable monthly option without costing me the most over the duration of the loan. Go to my blog to learn what type of loans I had considered and the pros and cons of each.