subject: Why Get A Fixed-rate Loan [print this page] Are you excited to get your own Sugar Land real estate property? Well, visiting and viewing several Sugar Land Homes for Sale you saw from online Sugar Land MLS will be very fun but do not hurry the process if you have not considered yet all the factors that may affect the home buying process. One of the relevant things that need your attention is the type of mortgage you are going to apply for in a lending company if you know, you cannot financially support this endeavor using your own money. There are several types of mortgages and one type of home loan that the lending officer might provide you is the fixed-rate mortgages. With this type of loan, the interest rate and the monthly payment will not change throughout the entire life of the mortgage. Loans like these have thirty-year amortization, which is more convenient for the homebuyers because it only requires them much lower monthly payments. If you are going to choose the fifteen-year amortization, you should anticipate that the monthly payments are higher because of the shorter life of the loan. Considering the pros and cons of getting a fixed-rate mortgage will be very helpful for you to be able to come up with a smart decision regarding your financing plans and strategies. Remember that home purchasing is a long-term investment and it is only necessary that you will be comfortable with the payment options you will use for your home loan.
Advantages
One of the clear benefits of this loan is that your monthly mortgage payments will remain the same for the whole period you are paying for it. Homeowners need not to worry also about the market condition. No matter where the market goes, whether it goes favorable or unfavorable for the buyers market, the interest rate of the loan will not be affected. In general, the fixed-rate type of loan is a hassle-free choice for you. It is even preferred by government programs like the FHA and VA loans. You will be ensured by the stability of payment rate provided by the fixed-rate type of loan.
Disadvantages
However, there are also disadvantages that come with this type of loan. One of these is that it has a higher interest rate. Usually, there are homebuyers that pay a premium so the fixed mortgage rate can be locked in. The adjustable-rate mortgage, which is another type of loan, can use some discount.
Many homeowners also fail to refinance their loan if there is a good and favorable condition occurring, mainly because they are too fixated with the low fixed rate they get from the loan. Most of them are scared that they will lose the low interest rate but sometimes, refinancing to and shopping for an adjustable-rate mortgage will be more financially favorable for them.
