What Is Fixed Rate Mortgage?

Mortgage Rates Trends

(PRWEB) March 3, 2005 -- Fixed Rate Mortgage (FRM) as the name suggests is a single rate locked – in for the entire term of the mortgage. The terms you can lock in for are usually 10, 15, 20 or 30 years.

How is an FRM better?The initial payment for an adjustable mortgage may seem more alluring but it is only till that. You get a certainty as to what your monthly expense on mortgage will be. It helps you to plan your budget properly. Especially if you are person who gets a fixed take home salary every month, you can make the best use of a fixed rate mortgage.

If the interest rates are low in the market, then you should go in for a fixed rate mortgage. This is because; there are chances that the rates might increase, then you will still have a lower repayment to make very month. Thus you save a lot of money compared to those who have locked in an adjustable rate mortgage. As the base rate changes, the adjustable rates also change accordingly.

The amount of down payment for a fixed rate mortgage is comparatively low. If you plan to stay in the house for many years then this is the right option for you , as you know when your loan will be repaid if you meet the monthly obligations regularly.

In what situations is an FRM not advisable?• If you want to make lower initial payments, you must go in for an ARM.• If you are planning to take a second mortgage• If you plan to refinance• If you plan to stay in the house for a lesser period of time• The markets are volatile and the trends are towards a record low rate in interest.

Thus whenever you take a mortgage you must analyze your financial situation and how you want to repay the loan you have taken. You must have the foresight to guess what the rates are going to be or seek a financial advisors help in this regard.

For more information on mortgage rates you can log onto:http://www.mortgagekb.com

Mortgage Rates Trends

How to Compare Mortgage Deals

Mortgage Rates Trends

As a mortgage is typically a rather large loan to which you are committing yourself to consolidating over a period of up to thirty years, the choice of mortgage plan becomes very important indeed. Remember that if you make a mistake in choosing your mortgage, the ultimate cost could be losing your home.

Property is a great investment though; therefore the risk should be well worth it, especially if you take care to make the right choices. The benefits of property ownership should be compared to the cost of the mortgage and the risk involved, allowing for an informed and rational decision of whether to buy or not. The question is... how do you find the best low rate mortgage?

If you are reading this article, then you are well on your way, because the most efficient way to compare mortgage deals is by exploring the internet, here you can locate excellent websites providing mortgage help such as free quotes and all the information you need on the diverse payment plans and the related benefits or compromises. At the end of the day the goal is to find the lowest mortgage rate for the amount you want to borrow and the time period over which you want to pay it off. To do this you need to locate the best type of deal for you, with regard to capital amount and payment plan, and then compare the rates.

Naturally there will be the variation in mortgage rates from firm to firm, in part determined by the sum total of the loan and the period of repayment. Beyond these variables lie the factors which should aid your hunt for the best mortgage deal. It is therefore important that you look into all the options available on the market.

The final determinant, or basis of the rate you will find yourself paying, is the financial market and as such you should find the rates quoted to you lining up to the firm's standard variable rate, or a tracker rate tied to the Bank of England's repo rate. To spice things up many firms offering mortgages package their deals with options of fixed mortgage rates, adjustable rates, capped rates cash-back deals or discount rates. It is important to understand the implication of opting for any one of these options, and then weighing up the convenience and the cost which it will incur upon your monthly budget.

Finding the most suitable mortgage for your individual circumstances and getting it at the lowest rate are both factors which can considerably minimise or reduce the risk factor of taking out a mortgage to buy property. Ultimately you need to ensure that you can comfortably meet your mortgage repayments over the time it takes to gain complete ownership of your new property.

Compare mortgage deals before making any decisions.

About the Author
Marius Bezuidenhout

Mortgage Rates Trends