When considering their monthly repayments, many people considering buying a home look 15 year fixed mortgage rates. No-one wants a mortgage hanging around their neck forever but with home buyers entering the market later, an early repayment of this loan is important. It may take some time to reach a decision as there are many things to contemplate. Ensuring the repayment remains the same throughout the mortgage term is very important. Steer clear of lenders that are offering unbelievable deals because they probably are. A 15 year fixed rate mortgage means the interest rate remains stable for the life of the loan.
This is always a good thing for those people that do not like surprises. My wife and I had already decided to research long-term fixed mortgage rates when we started looking at homes for sale.Our aim was to pay off the mortgage as soon as we could without getting into trouble with high monthly payments. So in consideration of this point, we also looked at longer, 15 year fixed rate mortgages as well.Still, having a mortgage close to retirement was not what we were looking for, so we decided to try for a loan with a 15 year fixed mortgage. There was obviously very good reasons to finish paying the loan off early.
Taking everything into account we finally went for the easier 15-year mortgage plan instead, as professionals mention. Many factors were taken into account when reaching this decision. The main reason was that I found out my wife was pregnant.My wife decided she wanted to raise our child at home so I could not be certain of her monthly financial commitment to our household expenses. The downside to the 15 years fixed mortgage rate was the higher monthly repayment. We just decided we would probably get into trouble if we took this route. A thirty-year loan brought the monthly payments down to a reasonable level.
We found that if we could make a few extra payments throughout each year then it would gradually reduce the principal sum owed. It is possible to take years off your loan if you can make a few extra payments during each year. This may be difficult but well worth the effort in a few years down the line. Our desire for a 15 year fixed rate mortgage was second place to our more immediate needs. Things worked out well anyway, even though we were unsure about it to start with.
On a typical 15 year fixed rate mortgage, you’ll pay your monthly payment of which a percentage of that amount would go toward the principal and the other percentage goes towards interest. This is done on a sliding scale, so the first years of the mortgage, you’ll be paying more in interest to the bank than paying down your loan. This is as designed by the banks who fund these mortgages. Their expectation is that they get their interest paid to them before you’re “allowed” to use more of your regular monthly payment to go towards the principal. This is all done behind the scenes, but it is interesting to know that you won’t start paying more towards your principal than interest until year 22 of your mortgage. There isn’t anything to prevent you from paying down your mortgage early, however, and may be a very good idea depending on your life situation.
Establishing your first fixed rate mortgage or even refinancing for the 10th time shouldn’t be a complicated process. The key to getting this done is to find a loan officer you can trust who will work with you and educate you as needed so that you understand what you’re paying for. Because this is such a large dollar amount that you’ll typically be paying for a home, there are ways that you can get caught paying more than you should and even small percentage changes over the life of the loan may result in you paying thousands of dollars more in interest. There are a lot of mortgage calculators out there as well you can use to give you some rough estimates.