Mortgage
Custom Search
 

Home
Second Mortgages
Home Mortgage
Bad Credit Home Loan
Mortgage Refinance Rates
Adverse Credit Mortgage Loan
Home Equity Loan
Best Homeowner Loans
Poor Credit Mortgage Refinance
Zero Down Mortgage Loans
Sitemap
 
Understanding Fixed-rate Mortgages
by Chileshe Mwape

A fixed-rate mortgage is a mortgage on which the interest rate is set for the term of the loan. Your interest rate stays the same for the term of the mortgage or for a specified period of time. Most people use a fixed-rate mortgage. In fact, about ..

A fixed-rate mortgage is a mortgage on which the interest rate is set for the term of the loan. Your interest rate stays the same for the term of the mortgage or for a specified period of time. Most people use a fixed-rate mortgage. In fact, about 75 percent of all home mortgages have fixed rates. The main advantage of a fixed-rate mortgage is that you always know exactly how much your mortgage payment will be, and you can plan for it.

A Fixed Rate mortgage will offer you the security of knowing that your mortgage interest rate will not change during the term of your fixed rate. For example, a lender can offer a 30-year fixed loan to a homebuyer at a 6.5% interest rate. The loan is locked in to the 6.5% interest rate, even if the market interest rate rises to 8.0%. Conversely, if the market interest rate decreases to 4.5%, you will continue to pay the 6.5% interest rate. A Fixed-Rate Mortgage applies the same interest rate toward monthly loan payments for the life of the loan.

Features:

- Straightforward and easier to understand than Adjustable Rate Mortgages (ARMs).

- More secure for the buyer and very popular with first-time home buyers.

- Ideal for anyone who likes to budget monthly expenses and plans to keep their home for several years.

- Since the risk to the lender is higher, fixed-rate mortgages generally have higher interest rates than Adjustable Rate Mortgages (ARMs).

- Tend to have higher initial monthly payments compared to those of adjustable rate mortgages.

- Fixed-rate mortgages are less flexibility than adjustable rate mortgages.

With adjustable rate mortgages the interest rate is not fixed, but changes during the life of the loan in line with movements in an index rate. The advantage of an Adjustable Rate Mortgage is that you may be able to afford a more expensive home because your initial interest rate will be lower. In a fixed-rate mortgage, your interest rate stays the same for the term of the mortgage.

Copyright © 2005. Chileshe Mwape writes for The Secured Personal Loans Website at: http://www.secured-personal-loan.org.uk/ and he’s also a regular contributor to the Fixed-rate Mortgages blog at http://www.fixed-rate-mortgages.blogspot.com/

This article may be reprinted online as long as all the above links are active and clickable.

 
NB: This site is not responsible for any content in it. Email us at daviscarlod4(at)gmail(.)com
atlanta austin boston chicago cleveland dallas denver detroit honolulu houston inland empire kansas city las vegas los angeles miami minneapolis nashville new york orange co philadelphia phoenix portland raleigh sacramento san diego seattle sf bayarea st louis tampa bay wash dc alabama alaska arizona arkansas california colorado connecticut delaware dc florida georgia guam hawaii idaho illinois indiana iowa kansas kentucky louisiana maine maryland mass michigan minnesota mississippi missouri montana nebraska nevada n hampshire new jersey new mexico new york n carolina north dakota ohio oklahoma oregon pennsylvania puerto rico rhode island s carolina south dakota tennessee texas utah vermont virgin islands virginia washington west virginia wisconsin wyoming alberta brit columbia manitoba n brunswick newf & lab nova scotia ontario pei quebec saskatchwn territories abbotsford calgary edmonton halifax hamilton kelowna montreal ottawa quebec st john's toronto vancouver victoria winnipeg more .. bangladesh china india indonesia iran iraq israel japan korea kuwait lebanon malaysia pakistan philippines singapore taiwan thailand turkey UAE vietnam west bank au/nz australia micronesia new zealand argentina bolivia brazil caribbean chile colombia costa rica dominican ecuador el salvador guatemala mexico nicaragua panama peru puerto rico uruguay venezuela africa egypt ethiopia ghana kenya morocco south africa tunisia austria belgium bulgaria croatia czech repub denmark finland france germany great britain greece hungary iceland ireland italy luxembourg netherlands norway poland portugal romania russia spain sweden switzerland turkey ukraine UK amsterdam athens bangalore bangkok beijing barcelona berlin budapest buenos aires delhi dubai dublin hong kong london madrid manila melbourne mexico moscow paris rio de janeiro rome seoul shanghai singapore sydney tel aviv tokyo zurich