CreditCards — Tips

Considering whether you need a 30 or 15 year fixed mortgage rate is important for people looking to buy a home and concerned about their monthly payments. No-one wants a mortgage hanging around their neck forever but with home buyers entering the market later, an early repayment of this loan is important. Take some time to think about everything carefully before any agreement is signed. Probably the most important point is a guarantee of a constant interest rate for the duration of the loan.

It is always wise to avoid agreements that do not appear to have any negative aspects because they invariably have but are hidden. Interest rates remain the same throughout the life of the loan for 15 year fixed rate mortgages. The greatest benefit with this type of agreement is that there are no sudden unexpected amounts to pay. When we were looking to buy a home, my wife and I decided to go for a loan with a 15 year fixed mortgage rate.

Having a realistic, sustainable monthly payment on our mortgage was important even though we wanted to pay off our debt as soon as possible. As well as thinking about loans of 15 years, we also considered fixed rate mortgages that lasted 30 years as well. The problem was that we were not very happy about having a mortgage close to when we both retired so it was our hope a 15 year fixed mortgage rate would still be available to us. We were worried about the emphasis placed on early completion of the mortgage.

Taking everything into account we finally went for the easier 30 year mortgage plan instead. Although a number of things had to be pondered over, eventually the choice was made for us. Discovering my wife was having a baby was the most important reason. Because she wanted to be at home for our child, her income would not only be uncertain but also irregular. The downside to the 15 year fixed mortgage rate was the higher monthly repayment. All things considered, we just did not want to bite off more than we could chew. Despite the trepidation of having a longer term loan, it did reduce the repayments considerably.

During the year we can make additional payments which helps to reduce the amount owed. My making just a few of these payments each year we discovered that a number of years could be taken off the mortgage term. This may be difficult but well worth the effort in the a few years down the line. Taking our needs and abilities into account was more important than our desire for a shorter term mortgage plan. Anyway, everything worked out fine despite our hesitancy.