Learn the Benefits and Drawbacks of The Lowest Fixed Rate Mortgage

2007-06-20 15:49:53

( Financial )



If you are familiar with mortgage, then a fixed-rate loan is nothing new to you. This kind of option can be more appealing than an adjustable-rate mortgage.

From the name itself, the lowest fixed rate mortgage remains constant throughout the maturity of the loan. With this kind of mortgage, you pay identical rates of interest, which means that your monthly amortization does not change.

The Advantages of Fixed-Rate Mortgage

Fixed mortgages is preferred by most borrowers because it has a security clause attached to it. It allows the borrower to set aside a certain amount for the payment of his mortgage. In addition, compared with an adjustable rate mortgage, this kind of loan is convenient on the pocket because the amount that the borrower pays is constant and is not totally dependent on the changes that happen in the market.

The Disadvantages of Fixed-Rate Mortgage

However, the primary setback of lowest fixed rate mortgage is that while it lets the borrower pay a pre-determined amount, the interest rate of this kind of mortgage is considerably higher. Moreover, the interest in a fixed-rate mortgage may be good for only a certain number of years, and then the rate can either increase or become fixed for another period of time.

Finally, a fixed-mortgage rate is best for people who are working on a budget that they simply cannot afford an increasing rate.

If you are still not certain if a fixed-rate mortgage is your ideal choice, you can seek the advice of an independent financial advisor. They are the most knowledgeable when it comes to the lowest fixed-rate mortgage. Consulting a professional mortgage advisor can help you assess if fixed-rate mortgage is the perfect loan for you.

Finally, you can compare various lowest fixed rate mortgage deals to make sure that you choose the offer that satisfies your preference and needs.


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