Information on Fix Rate Mortgage Packages

2007-03-08 10:33:40

( Financial )



You want the sense of security that comes from having your own home. But very few can buy a house outright, paying with cold cash or check in hand. You, like others before you, have to make one of the most important financial decisions of your life, and take out a mortgage.

You have two main options. With the fix rate mortgage, the interest rate on your loan stays the same. You will not be off balanced and distressed, by sudden and unwelcome changes. Many would-be homeowners welcome and opt for this stability.

If you opt for an adjustable mortgage, you have to be prepared for changes in the interest rate. This can work to your advantage, however, if developments in the national or global economy tend to lower interest rates. This is something that you cannot take advantage of if you have a fix rate mortgage.

Fix rate mortgage packages traditionally last more than 10 years or so. Usually, the longer the duration of the mortgage, the lower the monthly amount that you have to pay. On the down side, the total accumulated interest that you have to pay on the loan is higher. If you, however, choose the 15-year fix rate mortgage, you will have to pay a higher monthly amount. On the other hand, the total interest is less than what you would pay with a 30-year fix rate mortgage. You will also have the advantage of owning your home free and clear much earlier.

Some mortgages try to combine the positive points of both the fix rate and adjustable rate mortgages. The fix rate applies for about 7-10 years, after which it is adjusted based on prevailing conditions. You have both stability and a chance to grab at favorable economic conditions.

Would be homeowners need a good or satisfactory credit rating in order to get a loan and get the best terms possible in taking out a mortgage. You can improve your credit rating by fixing your credit problems. Read and analyze your credit report. Pinpoint any mistakes that may have been made and express your objections and basis or grounds to the appropriate credit bureaus. Wait for and analyze their decisions, and continue your follow up until you are satisfied. After fixing your credit rating, make sure you keep it. Make sure you pay your bills on time. Develop good financial habits.

Give special emphasis on mortgage servicing to make sure you can keep up with your obligations promptly. It is better to be safe than sorry. Use mortgage-servicing software if necessary to ensure that you do not lose your home, your family’s most precious earthly possession.


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