There are many mortgage products available in the market place. Currently there are fewer but there are still options. Below are a few reasons why you should be getting a fixed rate mortgage. A loan that is fixed for the entire term of the loan.
Security: While traditionally the real estate market is a safe investment in the past half decade it was very lucrative there are lows in every industry that you want to protect yourself for. If you are planning on being in your home for the long haul you need to make sure you have the proper financing that will allow you be protected against market down turns. Real estate is a long term investment and the best to protect your investment during times when the credit markets are tightening and we are experiencing dips in value is to be in a fixed rate mortgage.
Cheap money: The current mortgage market has great rates right now. Fixed products have been below adjustable rate products to promote better lending and a more stabile economy moving forward. Rates are lower than they have been in years so it is a great time to take advantage of some great deals.
Protection Against Market Swings: As we are seeing right now the market is in a tail spin. A mortgage that has a 30 year term is a long term investment. History has proven that good things come those who wait. NO matter when you buy property; if you wait long enough you will make money. Be prudent in your decision to ensure you are in a loan that is fixed for the entire length of the loan term so you are protected against market swings. Even if your plan is to stay in the house for 5 years when you get your loan by getting something fixed that you can afford you have a built in safety net if things change 4 or 5 years later and you need to keep you current loan.
Paying off your principal balance: I have said this is a more specific article related to just paying off your home but I cant stress this enough. Mortgage interest is frontloaded. You pay the majority of your interest off in the first few years of your loan, after that you are paying towards principal (paying off your house). If you get and adjustable rate mortgage that is fixed for 5 years you have paid a ton of interest off in those first five years. Once you refinance, unless you get into a loan that has a term of 25 years of less, you are virtually starting the whole frontloaded interest process all over. This will get you nowhere fast. You might as well rent if you are going to take this approach because you are not getting anywhere. You are just renting your money for the bank but not actually making a dent in what you owe them.
The reasons about are some of the major reasons to get a fixed rate mortgage. In summary, it is just a safer option given that we cannot predict the future.
Borrow safe! Your house should be fun not stressful.
Security: While traditionally the real estate market is a safe investment in the past half decade it was very lucrative there are lows in every industry that you want to protect yourself for. If you are planning on being in your home for the long haul you need to make sure you have the proper financing that will allow you be protected against market down turns. Real estate is a long term investment and the best to protect your investment during times when the credit markets are tightening and we are experiencing dips in value is to be in a fixed rate mortgage.
Cheap money: The current mortgage market has great rates right now. Fixed products have been below adjustable rate products to promote better lending and a more stabile economy moving forward. Rates are lower than they have been in years so it is a great time to take advantage of some great deals.
Protection Against Market Swings: As we are seeing right now the market is in a tail spin. A mortgage that has a 30 year term is a long term investment. History has proven that good things come those who wait. NO matter when you buy property; if you wait long enough you will make money. Be prudent in your decision to ensure you are in a loan that is fixed for the entire length of the loan term so you are protected against market swings. Even if your plan is to stay in the house for 5 years when you get your loan by getting something fixed that you can afford you have a built in safety net if things change 4 or 5 years later and you need to keep you current loan.
Paying off your principal balance: I have said this is a more specific article related to just paying off your home but I cant stress this enough. Mortgage interest is frontloaded. You pay the majority of your interest off in the first few years of your loan, after that you are paying towards principal (paying off your house). If you get and adjustable rate mortgage that is fixed for 5 years you have paid a ton of interest off in those first five years. Once you refinance, unless you get into a loan that has a term of 25 years of less, you are virtually starting the whole frontloaded interest process all over. This will get you nowhere fast. You might as well rent if you are going to take this approach because you are not getting anywhere. You are just renting your money for the bank but not actually making a dent in what you owe them.
The reasons about are some of the major reasons to get a fixed rate mortgage. In summary, it is just a safer option given that we cannot predict the future.
Borrow safe! Your house should be fun not stressful.
About the Author:
The Mortgage Wizard writes informative articles about the mortgage industry to give you tips on financing. Check out some mortgage companies to find out about today's fixed rate mortgages.
No comments:
Post a Comment