fixed rate mortgage is a mortgage that is given at a fixed
rate of interest. Thus the interest rate and the monthly payments
are not affected by changes in the economic index. Today’s
market economics show that now is an excellent time to consider
a fixed rate mortgage. This is because today’s market conditions
practically guarantee a low mortgage rate.
With a fixed rate mortgage, you can be ensured that you will benefit from low interest rates for the entire term of your mortgage. This is because the rate remains fixed through dynamic market conditions. This is a good option if you do not foresee any substantial income increases in the future, are seeking the security of knowing the interest rates you will pay over the life or the loan and are getting the desired amount of a loan. A fixed rate mortgage is perfect for anyone who likes to budget monthly expenses and plans to keep their home for several years.
Adjustable Rate Mortgage
This is the other option to consider while taking a mortgage. Here the interest rate is adjusted as per changing economic conditions. Although the initial payments are lesser, these loans involve more risk as the interest rate varies. Also a fixed rate mortgage is more secure as you know that the monthly payment you will give is fixed for the life of the loan. This will occur regardless of rising interest rates, and you are also likely to have a lower down payment. Alternatively if you already have a mortgage and are looking for a second one you can also consider home equity loans, mortgage refinancing and debt consolidation.