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Fixed Rates Mortgage

One of the most popular mortgage programs is that of a fixed rate mortgage program.  To help you better understand more about fixed rates mortgages, let's dive into the way that they work, and why they would be a beneficial choice for someone looking for a home loan. 

First of all, the key word in this phrase is the fixed rate. Loans require the collection of interest in order to cover the overhead costs of the bank lending you the money. The interest is also used to make profit for the bank, so there really is no way of getting around making an interest payment when getting a mortgage. There are some mortgage programs that center their rates around the moving markets on wall street. This means that the rates are adjustable and change as the prime rate changes. This can be a good thing, and it can also be financially devastating if you play the markets wrong. In order to take all of the worry out of getting a loan interest rates, many banks now honor and make available the use of fixed rate mortgages. This means that the rate will never change on the loan during the entire life of the loan. For example, if you get a 5% interest rate on your fixed mortgage or mortgage refinance, you will pay 5% interest for the full 30 years of your loan. This can make it much easier for borrowers to adequately plan their budgets when it comes to making a monthly mortgage payment. 

Most traditional mortgage programs offer a standard 30 year fixed rate. These products can be VA, FHA, or your run of the mill conventional loan. These loans are definitely the most popular as people can count on a consistent payment during the life of their loan. If you are looking into mortgage refinancing, or if you are trying to refinance a bad credit mortgage, picking a fixed rate mortgage can be a great way of re-stretching out the payment to more affordable terms so that you don't have to worry about missing monthly mortgage payments. 

Fixed rate mortgage programs often offer some great rates as they are a tried and true program that has seemed to work well for many years for lenders and borrowers alike.  Interest rates differ from lender to lender, so making sure to do your research will ensure that you get the best rates possible when getting a mortgage refinance, or when looking to purchase a new home. 

 

  10 Steps to Home Ownership:

Step 1: Are You Ready?

Step 2: Hire a Realtor

Step 3: Get Loan Pre-approval

Step 4: Search for Homes

Step 5: Choose a Home

Step 6: Obtain a mortgage

Step 7: Make an Offer

Step 8: Insure Your Home

Step 9: Close the Deal

Step 10: Avoid Foreclosure

 

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