Shopping For The Best Fixed Rate Mortgage
Finding the best fixed rate mortgage may only be a few clicks away, but before continuing with your search, be aware that the best fixed rate mortgage can come in a wide variety of shapes and models.
If you are looking for the most popular, dependable, predictable, consistent, and steady mortgage, the 30 year fixed rate mortgage may be just the mortgage for you. Consider these points before making any decisions.
Shopping for the lowest mortgage rates will not necessarily get you the best fixed rate mortgage. These posted rates are usually higher than the initial low rates of adjustable rate mortgages (ARMs). But, while adjustable rate mortgages look like a good deal when interest rates are low, when the prime rate increases, so does your ARM interest rate and your monthly payments.
As the name implies, a fixed rate mortgage is one in which the interest rate is fixed and set for the term or life of the loan. In other words, the interest rate remains the same during the entire term of the mortgage or for a specified length of time.
The biggest benefit of a fixed rate mortgage is knowing precisely what your mortgage interest and principal payments are going to be. You can then create a budget for your household, knowing your exact home loan costs.
Refinancing With The Best Fixed Rate Mortgage
Refinancing a current mortgage can be a suitable idea for a number of reasons:
A home purchase loan
To lower your interest rate and monthly payment
Cash out to invest or pay off debt
To consolidate debt
A home improvement loan or an FHA home loan
To pay for college tuition
To avoid foreclosure proceedings
An extended illness, the loss of a job, unemployment and many other factors too numerous to mention can and will affect your ability to pay down their debt. At this point, securing the right mortgage loan program that best suits your personal and financial needs is important.
Fico scores, credit ratings and your credit history factor into getting the best fixed rate mortgage terms. By cleaning up your credit ahead of time, you can then negotiate to get the best fixed rate mortgage interest rate and terms.
If you are working with poor credit scores, the best fixed rate mortgage available to you may be accompanied by higher fees and/or interest charges.
By arranging suitable repayment terms with the lender, regular and affordable repayments can be made which, in turn, can begin to positively affect your poor credit rating and with careful financial management, even improve your credit score.
Best Fixed Rate Mortgage Terms
The two most commonly used fixed rate mortgages are the 30 Year fixed rate mortgage and the 15 Year fixed rate mortgage. Other terms such as 10 or 20 Year fixed rate mortgage exist, but they are not as commonly used.
If you want the lowest payment, a 40 year term mortgage is your best fixed mortgage.
If you want to pay off the mortgage quickly, a 15 year term is your best fixed mortgage.
Keep in mind that the payment will be higher than with a longer term mortgage.
Get your mortgage pre-approval document early on in the mortgage process. The loan approval document lays out the quoted mortgage terms in full so you will have no surprise fees and costs at closing.
To find the best fixed rate mortgage you can shop around on the Internet to compare the posted rates and terms on lendersâ€™ websites. Interest rates will vary from lender to lender, but keep in mind there is always room for negotiation if you are in good standing with your other creditors. With a good credit history, negotiating for a the best fixed rate mortgage is a prudent step.
You can use the lender you have been using all along, or you can shop around for the best mortgage you can find. By shopping for the best fixed rate loan, you can save many thousands of dollars over the term of your mortgage.
Before you decide on a mortgage lender, do your homework and find the mortgage offer that works best for your situation. See the Mortgage Tips above.
Don't like surprises? Find out what lenders see when they access your report BEFORE you apply for a loan. Click here for your comprehensive credit report.
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Of all contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money.
~ Daniel Webster
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