Introduction
Fixed mortgages loan is the one in which the interest rate remains fixed for the whole term of the loan. The basic difference between mortgages fixed loans and adjustable rate mortgages is in mortgages fixed loans despite whatever the market situation is, the interest rate remains same as it was decided at the time of approval of loan throughout the mortgage period. The biggest advantage of mortgages fixed loans is the owner of the home does not need to have worried about interest rate fluctuations which can be caused very often due to volatile market situation these days. Besides that normally home loans are long term loans and goes from the period of 10 to 20 years. In these years often there are chances that interest rate will increased manifolds but opting the mortgages fixed loans makes it easier for the home owner.
Detail
It can go both ways because sometimes choosing the fixed rate mortgage can turn in a bad deal. In a volatile market nobody can predict what will happen after few years. There are calculations available through which lender calculate the amount of risk and expected interest rate each year and on the basis of these calculations the lender decide about the mortgages fixed loans. Initially lenders charge much higher interest rates on mortgages fixed loans but it remains same whereas in adjustable rate loans initially rate is low but it can go upwards each year. In this regard it is important that borrower must understand the mechanism of risk involved in both type of mortgage loans so that they could choose the best options as per their financial situation and perception about the interest rates in future. Another advantage of mortgages fixed loans is by choosing this type of mortgage loan you can predict the actual price of your house. There are many type of fixed rate mortgage loans are available in the market such as 15 years loan, 30 years loan, biweekly mortgage loan and convertible mortgages.
Features
30 Years Fixed Mortgage Loan
This 30 year fixed mortgage loan is a traditional choice of the borrowers. However keep in mind that the longer your loan period is the more interest amount you have to pay.
15 Years Fixed Mortgage Loan
One of the better available options among mortgages fixed loans is 15 year loan. In this loan you can clear your loan amount in almost half time than 30 years loan. Consequently you have to pay much lower interest amount. This is an ideal option for those who want to clear their loan amount in shorter span of time.
Comments
Biweekly Mortgages
This is another type of mortgages fixed loans. This is normally 18 to 19 year loan in which the borrower has to pay biweekly payments or have to pay after every two week. This results in 13 payments in a year which reduces the amount of total interest.
Convertible Mortgages
This type of mortgages fixed loans are also known as reduction option loan (ROL) This is a new type of fixed mortgage loan in which lenders provide borrowers option to convert their loan after paying certain amount of money from $100 to $200.
