A fixed rate mortgage is exactly what it sounds like, a mortgage with a known non-variable rate. These mortgage loans are usually for 15 – 30 years and once locked in, your monthly mortgage payments will always remain the same. Before banks started doing high risk flexible arm loan, the fixed rate mortgage was an industry standard. Generally people feel more secure knowing exactly what they owe and when mortgage interest rates are low, it’s definitely advantageous to lock in a low rate. One downside to the fixed rate mortgage is if you lock in a fixed rate mortgage when interest rates are higher, when rates go down, then you will need to refinance the home to get a lower monthly payment. If you do this, you will end up paying a lot of extra fees.
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