Posts Tagged ‘fixed rate mortgage’

Will mortgage rates start to climb?

If you’ve kept up with mortgage rates over the past several months you have noticed that they have been somewhat steady. Rates sharply declined at the end of last year and continued the downward fall until just recently. Will mortgage rates stay steady, start to increase or continue to decrease over the next several months?

I’m not a mortgage rate expert or by no means am I qualified to predict mortgage rate trends, but if you are in a variable interest rate mortgage loan I would seriously consider getting into a fixed rate mortgage soon, why?

As I mentioned earlier mortgage rates have been somewhat stable for the past several months. Fixed interest rates continue to hover around the 5.5% mark which is a great rate. With some positive signs of recovery from the U.S. economy it’s doubtful that the rates will take any significant drop over the next few months. Therefore I think it’s a great time to lock in a fixed rate interest rate around 5.5%.

Fixed rate mortgage loan information

Fixed mortgages or fixed rate mortgages are loans that have an interest rate that remains the same throughout the entire term of the loan. Adjustable rate mortgages or arm loans have interest rates that “float” or adjust according to current prime interest rates.

There are different variations of fixed mortgages which include different terms (how long the mortgage is financed for). Common terms for fixed rate mortgages are usually multiples of 5 and include 30 year, 25 year, 20 year, 15 year, 10 year and 5 year terms. Usually choosing a shorter term for the fixed mortgages will produce better interest rates.

There are even more variations of fixed mortgages which include balloon loans, fixed rate interest only mortgage loans, and ARM loans can even have fixed rates for a certain period of time and then adjust after that time expires.

When to have a fixed rate mortgage

You should opt for a fixed mortgage when interest are low and you plan to stay in your home for an extended period of time or if it’s your final home.

When to not have a fixed rate mortgage

If you only plan to stay in your house for a few years then a fixed rate mortgage may not be the best option for you. You will get a better interest rate on a vairable rate loan or an ARM loan than a fixed rate mortgage loan. A ARM loan is a great option if you only plan to stay in your home for 3 – 5 years or less.