Reprinted Articles

It is quite normal for potential home buyers to look into 30 year or 15 year fixed mortgage rates when considering their monthly repayments. Many of us are buying homes later in life these days so it is not unreasonable to have the house paid off early. It may take some time to reach a decision as there are many things to contemplate. One important point is to ensure that the interest rate doesn’t change during the life of the loan.

Steer clear of lenders that are offering unbelievable deals because they probably are. A fixed rate mortgage maintains a set interest rate during the period of the loan. For those individuals that don’t like hidden surprises, this is always a benefit. Both my wife and I decided to research fixed rate mortgages when we started looking at homes for sale.

Even though it was important for us to pay off our loan at the earliest possible opportunity, we didn’t want high, unrealistic monthly payments which we would have trouble maintaining. When we considered fixed rate mortgages we also looked into even longer term loans that spanned 30 years as well. No-one likes the idea of having a mortgage when they are close to retirement, and we were no different, so it was still our hope that a 15 year fixed mortgage rate plan would still be an option. There was a lot of pressure to have the house paid off as soon as possible.

It took some time but we finally chose to go ahead with the 30 year mortgage plan. Although a number of things had to be pondered over, eventually the choice was made for us. It was easier reaching this conclusion when I learnt my wife was expecting a baby. My wife decided she wanted to raise our child at home so I couldn’t be certain of her monthly financial commitment to our household expenses. The problem we could see was the increased financial commitment on a monthly basis if we had opted for the 15 year fixed mortgage rate. For us it just wasn’t feasible as we would just be in over our heads. A thirty year loan brought the monthly payments down to a reasonable level.

Making a few additional lump sum payments during the year helps bring down the amount owed. It is possible to take years off your loan if you can make a few extra payments during each year. Although this isn’t easy to achieve, in the long term it is well worth it. Taking our needs and abilities into account was more important than our desire for a shorter term mortgage plan. In retrospect, everything worked out ok for us by going down this road. Construction loans offer the same options when searching for a loan. The construction loans options include fixed and arm construction to perm loans.

Last 5 posts by Rick Gomez

• Banking online for a construction loan to build your dream home - July 10th, 2008
• Do you need a home improvement loan or a construction loan? - July 9th, 2008
• When building your new home make the master bedroom perfect. - May 16th, 2008
• Focus on the details when applying for a construction loan. - May 8th, 2008
• The truth about mortgages, construction loans and foreclosures - May 6th, 2008

Tags: Mortgages