No Closing Costs Fixed Rate Mortgage
Many couples buying a home are face with the question of whether to opt for a 15 or 30 year fixed mortgage rate. Many people wait until they are older before taking on the responsibility of a mortgage so an early payment of this large debt is an important issue to think about. Decisions of this nature need careful consideration before any commitment is made. It is always a good idea to confirm that the interest rate does not alter during the term of the mortgage.
If you are offered a deal that appears to be too good to be true than it probably is. For loans that have 15 year fixed mortgage rates, the same amount of interest is maintained throughout the life of the loan. For those individuals that do not 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.
Although paying off the mortgage was our main priority, we did not want to have monthly payments that were uncomfortably high. As well as thinking about loans of 15 years, we also considered fixed rate mortgages that lasted 30 years as well. We did not really like the prospect of having a mortgage as we approached retirement so were really hoping to get one of the loans with 15 year fixed mortgage rates. There was obviously very good reasons to finish paying the loan off early.
After taking everything into consideration we decided on a 30 year loan instead. There were many things that factored into this decision.The main reason was that I found out my wife was pregnant. My wife was going to raise our child from home so her addition to the monthly income would be restricted. Our monthly payment would have been too high if we had committed ourselves to the 15 year fixed mortgage plan. We could see the financial problem of getting in too deep even though there were benefits to a shorter loan period. 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. This is well worth it in the long term but it does require some discipline. Taking our needs and abilities into account was more important than our desire for a shorter term mortgage plan. All things considered, it all worked out for the best in the end.
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