|
This would also help in maintaining the interest rate over the life of loan.The fixed rate mortgage has an interest rate that remains the same through the entire period of the mortgage. That is why knowing the current fixed rate mortgage rates is very important. This will help you to decide whether to opt for a 15-year, 20-year or 30-year fixed rate mortgage. Remember, the interest rate will be the lowest for the 15-year mortgage
30-year fixed rate: The 30-year fixed rate offers the greatest tax benefits as you can avail maximum tax deductions. The interest will be higher compared to other fixed rate mortgages primarily because of the duration of the loan. However, this is the best option for those who intend staying in the house for more than 5 years or those who do see an increase in their income in the future. As the mortgage is for 30 years, you will end up making smaller payments over the term of the loan compared to 20-year and 30-year mortgages.
20-year fixed rate: In this mortgage, because the term of the loan is 10 years less than the 30-year mortgage, the interest rate decreases. This type of loan is not that common and you will have to look for a lender who offers it. The advantage of this loan is that while you will be making higher payments compared to the 30-year mortgage, you will build the equity in your home faster.
15-year fixed rate: This mortgage has all the benefits of the 20-year mortgage but it has the lowest interest rate out of all the three. Therefore, if the current fixed rate mortgage rates are low, this would be the most beneficial provided you can absorb the monthly payments, which will be high.
More Articles :
|
