If You Want Security Get a Fixed Interest Rate Mortgage
Fixed interest rate mortgages are considered by many to be the safest mortgage loan available. This is because fixed rate mortgages have rates that remain the same throughout the life of the loan. With a fixed rate borrowers are never faced with unexpected changes in there monthly payments.
There are two main types of fixed rate loans. A thirty year fixed rate loan allows you to spread your loan and interest payments over a period of thirty years. It allows for lower monthly payments but your interest rates will be higher due to the higher risk to the lender. The equity in your home is accumulated at a much slower rate due to the fact that most of your interest will be paid off in the beginning of the loan. However there is a benefit to this, your tax deduction will be higher.
A fifteen year fixed rate loan is similar but spreads your loan and interest payments over fifteen years. The benefit of this kind of fixed rate mortgage is that the equity in your home is accumulated at a much faster rate because the risk to the lender is less. You will have higher monthly payments with a fifteen year loan but you will pay much less in interest every month.
Besides these two fixed rate loans there are also forty year loans and fifty year loans available to borrowers today. These loans are not very popular due to the extended period of time that you have to pay on the loan.
With fixed rate mortgages the interest rates tend to be a little higher than adjustable rate loans. The reason for this is that with adjustable rate loans there is the risk of interest rates rising, while fixed rates do not have this possibility. This does not mean that an adjustable rate is better then a fixed rate. With a fixed rate mortgage you never have to worry about your payments going up because of an adjustment in rates. An adjustable mortgage loan can and more then likely will be raised.
Another great benefit of having a fixed rate mortgage is that the chance of foreclosure is extremely low. This is due to the fact that with this type of loan you can always depend on the payments staying the same, allowing for monthly budgeting.
With the amount of people in foreclosure and the economic problems that we are facing today a fixed mortgage loan may be the best option for you. The reason for this is that with a fixed rate mortgage you will be assured a regular monthly payment without increases that could possibly make it difficult or in some cases impossible to afford your monthly payments.
A Fixed Rate Mortgage is definitely the safest way to go these days. To learn more about different kinds of Mortgages Visit my website.
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