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Choosing a Fixed Rate Mortgage

The vast majority of my clients who come to me for mortgage service and advice are only interested in a fixed rate mortgage. I can”t blame them…as of this post, mortgage rates are at or near HISTORIC lows. It”s an incredible time to purchase or refinance because the mortgage money is so cheap right now.

Fixed rate loans now come in many different types. Generally, my clients are picking from one of two options; the 30-year fixed and the 15-year fixed (we also do 20- and 25-Year fixed mortgages). If a borrower is planning on being in the same home for a long period of time, a 30-year fixed may be more attractive because it offers stability. The monthly payment will remain consistent over the life of the loan. If interest rates are at historic lows at the time the borrower is seeking to obtain financing, this is a casino online good program to consider.

A 15-year fixed loan program offers the same stability, but the accelerated amortization schedule makes the monthly payment substantially higher. While the interest rate may be lower on this type of loan, the borrower must be willing to commit to a higher monthly payment. If the borrower wishes to retire in 15 years and be debt-free at that time, this loan program may be more suitable to the borrower”s long-term needs.

It is also possible to make pre-payments on a 30-year loan and reduce the life of the loan, as well as the overall interest payment, without committing to the higher monthly payment of a 15-year program. As long as there is no pre-payment penalty associated with the 30-year mortgage, pre-payment offers the borrower the latitude to make additional payments when it is affordable. If cash flow becomes difficult, this arrangement will not put the borrower in a compromising position.

As always, my door and phone are always open to you if you have questions about your current mortgage or would like a complimentary mortgage consultation about a new loan you are considering. Call me (208-880-0316) or email me at any time…I”m here to help!