Published on: September 2, 2021
Buying a home may be an exciting milestone for anyone looking to go out and experience the “real world” on their own. However, one essential yet stressful part of this otherwise fun house hunting process is taking out a mortgage. Part of the challenge is figuring out whether to take out a fixed-rate or variable-rate mortgage loan.
While there are advantages to both types of mortgage products, this blog post will fill you in on the details about a fixed-rate mortgage. Read on to find out why this type of mortgage product may work well for you.
Reasons Why Fixed-Rate Home Loans Might Work for You
There are many reasons why fixed-rate mortgages may be a good idea for you. Below are the most common reasons you may want to get this type of mortgage product when you purchase a home.
1 – They Provide Certainty
Fixed-rate mortgages have the same interest rate, as their name implies. People will anticipate the amount of interest they will pay on their mortgage each month because of the fixed rate.
2 – Fixed Rates Protect You From Sudden Rate Hike
Sometimes, interest rates may fluctuate and reach extremely high numbers. You will be protected from paying unreasonably high interest rates because of your fixed-rate mortgage.
3 – They Allow You to Budget More Effectively
Because you will know exactly how much to pay each month, it will be much easier for you to budget your expenses and pay your bills. This will help you better manage your finances and stay on track when it comes to your financial goals.
4 – Assured Savings
In relation to being able to budget your money properly, you will have greater chances of accumulating savings. If you choose a variate-rate mortgage, you may not be able to have this level of assured savings because you will not be able to predict the amount of interest you will pay each month.
Possible Setbacks
To be able to truly help you make an informed decision as to whether or not to take out a fixed-rate mortgage, here is a list of the possible cons that come with this type of mortgage product.
1 – You May Be Stuck with a Higher Interest Rate
One significant disadvantage would be if the rates suddenly hit an all-time low, you may be stuck paying a significantly higher interest rate in comparison to people who took out variable interest rates.
2 – You May Have a Hard Time Refinancing
Because there are higher exit and shifting fees, it may prove to be more challenging to get your mortgage to refinance should you choose to do so in the future.
Conclusion
Whether you choose to get a fixed-rate home loan or not, the key is to find a reliable, tried-and-tested mortgage company is the key. The mortgage agents will help you find the best option available that fits your budget and needs. Keep in mind that the information provided in this article is general, and to get personalized advice, talking to a mortgage broker is your best bet.
Whether you are looking for a personal loan, FHA loan, or another type of housing loan product, Pennix Mortgage has you covered! Whether you are purchasing or refinancing, when you unite with PENNIX Mortgage, you can rest assured that you’ll be getting the best loan, lowest rate, and be able to close quickly.
