Finance @apss2007

For many people, whether first time buyers or not, the prime consideration when looking at a fixed rate mortgage is the monthly installmet cost. A large number of individuals these days have decided to wait and are purchasing homes later but they also need to settle their mortgage early. However, there are many factors to consider before signing any papers.

An fundamental consideration to recall is that you want to make sure that the rate of interest doesn’t change during the course of the loan. It is always wise to avoid agreements that look to too good to be true because they invariably are. The rate of interest remains the same for long term fixed rate mortgages over the life of the loan. This has obvious benefits, especially for anyone who doesn’t like surprises especially those associated with variable monthly mortgage repayments. When we were looking to buy a home, my wife and I decided to go for a mortgage with a fixed rate mortgage. Although it was fundamental for us to pay off our loan as soon as we could, we didn’t wish high, unrealistic monthly payments which we would have a problem sustaining.

In addition to looking at loans for a long run, 15 year fixed mortgage rate we also looked into loans that spanned 30 years as well. The problem was that we weren’t very happy about having a mortgage still running close to when we both retired and hoped that a fifteen year fixed mortgage rate would still be accessible to us. We were worried about the emphasis placed on early completion of the mortgage but had to agree it was what we wanted as well. Taking everything into account we finally went for the easier thirty year fixed mortgage rate plan instead. Because my wife desired to raise our child at home we couldn’t be certain of her monthly financial contribution to our household spending. Also, loans for a fifteen year fixed mortgage rate required a higher monthly payment. For us it just wasn’t feasible as we would just be in over our heads and in all probability be worrying about money every month.

After looking at the much lower sum we would be making on our regular payments with a 30 year fixed rate mortgage, there wasn’t any alternative but to go with it. During the year, if we have some spare cash, we can make additional installments which helps to lower the amount owed. Just by making a handful of supplemental payments throughout a one year period you can knock years off of your loan period. This is well worth the effort in the long term but it does require some discipline. Under different conditions, we would have preferred to have taken out a mortgage with a fifteen year fixed mortgage rate but we had to consider our other commitments as well. Altogether though, things worked out very well for us and we’re pleased we made the decision we did.