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If you suffer from worry and anxiety over your finances, a fixed rate mortgage can help you exert control over this one very important aspect of your finances. Consumers also find appeal in fixed rate mortgages because when the rates are low, they are very affordable and can represent excellent savings and give you one of the best fixed rate mortgage offers available.
With a little foresight and knowledge of mortgage terms, you can find the best fixed rate mortgage and keep your home finances stable. Sometimes, dealing with the paperwork of a mortgage is overwhelming, but Lending Tree has created a cheat sheet to help you learn some of the more critical terms you might find in your loan agreement.
Lending Tree – Mortgage Acronym Cheat Sheet
This incredibly informational article from Lending Tree can be found at http://www.lendingtree.com/mortgage-loans/advice/. This cheat sheet goes over common terms that anyone applying for a mortgage should be familiar with. Some of the terms that are defined are APR, CD, COFI, ECOA, FICO, GPM, HELOC, LTV, PMI, and TIL. If you aren’t familiar with those acronyms, you will definitely want to use the Lending Tree Acronym Cheat Sheet before you apply for any sort of a fixed rate mortgage. Knowing the terms of your contract agreement will ensure that you get the best fixed rate mortgage offer available and aren’t hit with any sneaky terms and conditions you didn’t understand before signing the dotted line.
If you’re looking into the best 15 year fixed mortgage rate, or commercial mortgage best fixed rate mortgages, you need to consider the pros and cons of using fixed rates. These pros and cons tend to be the same whether you get a best 10 year fixed rate mortgage or go with a longer 30 year term. However, the shorter the term of your mortgage, typically the better returns you’ll see on your investment, and the more money you will keep in your pockets instead of handing it over to your lenders.
The Pros Of 10 Year And 15 year Fixed Rate Mortgages
With 10 year and 15 year mortgages, you will be able to build up equity in your home in a much shorter time because of shorter amortization schedules. Amortization refers to the gradual decrease in liability of your loan over a specific period of time through regular, scheduled payments. You will also see an advantage in lowered interest overall with shorter term fixed rate mortgages.
In general, fixed rate mortgages offer you certainty. You will know exactly what your mortgage payment is, there will be no fluctuations in the total amount you owe on your home, and you are protected against interest rate increases during times of rising inflation. The consistency can be the perk that makes a best fixed rate mortgage comfortable for new and first-time home buyers. With a 10 year or 15 year fixed rate mortgage, you won’t have to deal with stress and uncertainty in your home finances, and you will be able to budget your income more effectively by knowing precisely how much you owe and what date it is due. Commercial mortgage best fixed rate mortgages can help you manage your business finances better too.
The Cons Of 10 Year And 15 year Fixed Rate Mortgages
The cons, or disadvantages of dealing with 10 year and 15 year fixed rate mortgages, are that your monthly payments are likely to be higher, the shorter your term is on your mortgage. You will incur an application fee, and you may choose to take a fixed rate mortgage in a time when interest rates are rising. The panic that some can feel about interest rates can often cause you to lock in an interest rate only to find that the best fixed mortgage rate you could have gotten is much lower in a week had you only waited. In that case, if you decide to later switch to a different lender to try to get a lower fixed rate, you will end up paying an early redemption penalty fee. Another downside to fixed rate mortgages is that you are unlikely to be approved if you have bad credit or are considered high risk. This is true for small business owners and sole proprietors whose only source of income may be difficult to prove depending on the type of commercial enterprise you are engaged in. Lenders are unlikely to approve 10 year and 15 year fixed rate mortgages for individuals in creative professions such as writing, art, or music unless you have a proven track record and can document consistent income.
Additional Fixed Rate Mortgage Resources Online
eFannieMae.com – Stability Over The Life Of The Loan
At https://www.efanniemae.com/sf/mortgageproducts/, you will find a mortgage search tool that allows you to search for single-family mortgage offerings from product name or amortization type. There is also an easy to understand bulleted list of the pros and cons of using a 10 year fixed rate mortgage loan. They also have a similar bulleted list for 15 year fixed rate mortgages.
Lending Tree – Glossary Fixed rate Mortgages
At http://www.lendingtree.com/smartborrower/, you will find the online glossary entry for 10 year fixed rate mortgages from Lending Tree. This online glossary entry is more an article that defines the benefits of obtaining a 10 year fixed rate mortgage, with information on amortizing, as well as a concise example of how a 10 year fixed rate mortgage would work with a $160,000 home loan.
How Stuff Works – Types Of Mortgages
At http://home.howstuffworks.com/, there is a comprehensive online series of pages about mortgages including the different types of mortgages and how fixed rate mortgages work compared to variable rate mortgages. This easy to understand information will be useful to you whether you already have experience with mortgages, or if you are a new home buyer looking to learn more about the pros and cons of fixed rate mortgages compared to variable rate mortgages.
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