The type of mortgage you take out can mean the difference between having a fully paid housing loan in as little time as possible and wallowing in debt for decades. As you want to enjoy a debt-free life, it’s important to choose a mortgage the best suits your needs and finances.
Most people stick with a fixed-rate mortgage (FRM) for many reasons. Here are some of them:
Security That Comes From Unchanging Monthly Mortgage Payments
This is arguably the biggest benefit a fixed-rate home loan delivers, especially since the current housing market hasn’t completely stabilized.
When you obtain an FRM from a reliable and established mortgage company in Tempe, you can be sure that no matter what happens to the market, you will continue paying the same amount every month. You don’t have to worry about sudden increases in rates that adjustable-rate mortgage (ARM) borrowers are susceptible to.
Easier-To-Make Monthly Payments
A fixed-rate mortgage may tie you with a longer contract, but it comes with the benefit of lower monthly payments. For instance, when you opt for a 30-year FRM, the lending company will spread your repayment across 360 months (30 years). This makes your required monthly payments lower, making it easier for you to pay for the house.
Option to Pay a Bigger Amount
Some lenders also allow their borrowers to put additional payments down in the form of a bigger monthly payment or advanced payments. Doing so gives you the opportunity to reduce the overall cost of your housing loan, as well as the amount of time needed to pay for the house. Check with the financing company first and ask about their pre-payment regulations.
Simply put, a fixed-rate mortgage is a good option if you want to stay in the same house for a long period, and if you prioritize lower, guaranteed monthly payments. Talk to your lender to get more information about this financing option.