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Fixed-rate mortgages are like your old Grandpa Ned. They stand like a rock in times of uncertainty, always stay the same no matter what happens and seem to have been around since the beginning of time. This type of mortgage has an interest rate that stays the same for the duration of the loan. On the other hand, adjustable rate mortgages have interest rates that change depending on the nature of the market. Fixed Rate mortgage are the most common forms of mortgage loans in the United States. The most common loan terms are 15 and 30 year mortgages. However, more and more lenders are starting to offer 40 and 50 year fixed-rate mortgages. These loans are designed to appeal to people who live in high cost of living areas where the median price of homes make it difficult to afford a home otherwise. Fixed-rate mortgages tend to have higher interest rates than adjustable rate mortgages and in turn can be more expensive. However, people who choose these types of mortgages take solace in the fact that they will know their payment. Fixed-rate mortgages are also designed to benefit people who plan to live in their homes for a longer period of time. Homeowners with adjustable rate mortgages don’t have the security of consistent payments. Their payments can rise along with the interest rate of the market. This can be good in positive economic times and are a good choice for those homeowners who plan to move within a few years because they will more than likely save money. It can also spell disaster for homeowners who can’t weather the highs and lows of interest rates. Because interest rates for fixed-rate mortgages are higher than adjustable rate mortgages, their payments are higher. This also makes it more difficult for borrowers to find and qualify for these types of mortgages. Usually, the borrowers with the higher incomes and credit ratings will be the ones who are likely to qualify for this type of loan. As with any large financial venture, it’s important to fully understand the terms and conditions of your mortgage before you pursue purchasing a home. So much information is available on fixed-rate mortgages today that it’s virtually impossible to say you didn’t understand what you were getting into. Also, ask your mortgage lender what type of mortgage is best for your personal situation. He will be able to personalize the pros and cons of each so you can make an educated decision that is right for your future, and for the future of your family. Please feel free to visit my site, you'll find a lot of great and useful information about financing or refinancing your property. Simply click on the link below or copy and paste it into your browsers address bar: http://www.seanwatson-mortgage-specialist.com/ You may also reprint this article as long as the resource box is left intact and all links are hyperlinked.
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