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Is A Fixed Rate Mortgage The Best Choice For Me?

By Bob Redtree

When shopping for a mortgage, one of the first choices a borrower confronts is whether a fixed rate mortgage is my best choice. Some factors are objective and involve looking at the numbers, but some are more personal, with a focus on your present housing situation, your future plans, and your tolerance for risk. Here are some of the issues that you’ll need to consider in making a good decision.

Interest Rates For Fixed Rate Mortgages Usually Start Higher

When comparing rates for fixed rate mortgages and adjustable rate mortgages, fixed rates are generally higher. This can have an effect on your ability to qualify for the mortgage, but lenders are savvy enough to consider the fact that the rate on an adjustable loan is likely to increase in the future, and may include this calculation in determining if you are qualified.

Is A Fixed Rate Mortgage The Best Choice For Me If I Plan To Move In The Next Five Years?

If you plan to stay in you home indefinitely, a fixed rate means that you will never have to be concerned about an increase in your monthly mortgage payment (although real estate taxes and insurance, if part of the payment, can certainly change over time.) An adjustable rate may well make sense over the short term, though, especially if you know that you will be out of the home before too many adjustments have happened.

Is A Fixed Rate Mortgage The Best Choice For Me If I’m Worried That Rates Will Rise?

With a fixed rate mortgage, you know what your payment will be and you never have to worry about changes in rates. Remember, too, that while you don’t have to watch rates like a hawk, a fixed rate can be refinanced as easily as an adjustable rate if rates have gone down enough to make a difference, giving you the chance to adjust your fixed rate mortgage on your own schedule.

Related posts:

1. Which Is A Better Choice A Fixed Or Adjustable Mortgage Loan?
2. Why Is A Fixed Rate Mortgage The Best Choice For Me?
3. Fixed And Variable Rate Mortgages – Which One Is Best?
4. Why Is A Low Fixed Rate Mortgage The Best Financial Decision?
5. Why Did The Payments On My Fixed Rate Mortgage Change?