May 28, 2008

Home Loan Interest Rates

Many couples buying a home are face with the question of whether to opt for a 15 or 30 year fixed mortgage rate. Many of us are buying homes later in life these days so it is not unreasonable to have the house paid off early. However, before you rush in and sign any papers, there are points to contemplate. Ensuring the repayment remains the same throughout the mortgage term is very important.

Avoid the mortgage loans offered by some lenders, those that sound unbelievable because they usually are. A 15 year fixed rate mortgage means the interest rate remains stable for the life of the loan. For those individuals that don’t like hidden surprises, this is always a benefit. My wife and I had already decided to research long term fixed mortgage rates when we started looking at homes for sale.

Home Loan Interest Rates...

Having a realistic, sustainable monthly payment on our mortgage was important even though we wanted to pay off our debt as soon as possible. It became obvious that we had to look at fixed rate mortgages over a longer period and not just 15 year plans. The 15 year fixed mortgage rate was the plan we really wanted because neither of us wanted to be still paying a mortgage when we close to retiring. It wasn’t easy for us because of the stress to pay the house off early.

Eventually we decided on a 30 year loan after looking at all the other possibilities. There are always a number of points to think about when a decision like this has to be made. The most important point was the fact I discovered my wife was having a baby. My wife was going to raise our child from home so her addition to the monthly income would be restricted. Loans that were based on 15 year fixed mortgage rates required a much higher monthly payment. For us it just wasn’t feasible as we would just be in over our heads. Despite the trepidation of having a longer term loan, it did reduce the repayments considerably.

We found that if we could make a few extra payments throughout each year then it would gradually reduce the principle sum owed. By doing this you can also reduce the term of the mortgage by quite a few years. Although this isn’t easy to achieve, in the long term it is well worth it. Our first choice would have been to go for the short term 15 year fixed rate mortgage solution but this did not help with our more immediate situation. Things worked out well anyway, even though we were unsure about it to start with.

Home Loan Interest Rates

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