With a fixed rate mortgage you know exactly what your principal
and interest payment will be for the life of the loan. What does
change is the increase in property taxes and homeowners insurance.
Interest rates can go up or down and it makes no difference to you.
Consider a fixed rate mortgage if you:
- Want the certainty of a fixed principal and interest payment
- Believe interest rates will go up
- Are on a fixed or restricted budget
- Plan on living in the home for an extended period of time
The two varieties of fixed rate mortgages are the 30 year fixed
versus the 15 year fixed. Generally, the interest rate on a 15 year
mortgage is a little lower than that of a 30 year mortgage but your
payments are higher, but not that much. Other terms such as a 20
year mortgage are also available from some lenders. If you are
interested in something other than the standard 15 or 30 choice -
ASK the lender.
