 |
|
|
Fixed Rate MortgagesFixed rate mortgages are currently the most common type of mortgage available.With a fixed rate mortgage both your interest rate and monthly payments remain the same throughout the length of your loan. This gives you the stability of knowing what you will have to pay each month rather than risking a rise in your monthly payments as the interest rate rises. You can apply for fixed rate mortgages that last for various lengths of time. The most common periods are 15 and 30 years. However, it is also possible to get loans for different legnths of time, such as 20 years. In general, the shorter the length of the loan, the lower the interest rate will be. A 15 year loan will usually have a lower rate than a 30 year loan, for eaxmple. PointsYou can often lower your interst rate on a fixed rate mortgage by purchasing points. A point is equal to 1% of your loan amount. For example, if you are borrowing $150,000, it will cost you $1500 to buy each point.You pay for the points up front in order to reduce the interest rate for the duration of the loan. If you are planning on staying in your house for along time without paying off your mortgage early, and can afford the points up front, it may be beneficial to buy points in order to reduce your mortgage rate. Getting the best rateThe rate quote that you receive will depend to a large extent on your credit history. If you are looking for a low interest rate it can be worth spending the time going over your credit report and trying to improve your credit score. If you are unsure about your credit, check out our Credit Report Agencies page. Many providers now offer a free credit check so you can see how you stand with regards to getting the best interest rate possible.Next: Adjustable Rate Mortgages (ARMs) Or, get an online rate quote now. |
