BENEFITS OF CHOOSING A 30 YEAR FIXED RATE MORTGAGE
Mortgage Rates Laredo TX
5810 San Bernardo Ave Ste 220,
Laredo, TX 78041, USA
Choosing a mode of interest rate payment, as simple as it seems can sometimes be a huge challenge for home buyers. Especially since lenders in Laredo and the rest of the US started designing more diverse ways of making these payments. However, there are two major modes of interest rate payments and these are the fixed-rate payments or the adjusted rate payments. Traditionally, mortgages were designed to either be a fixed rate mortgage or an adjustable rate mortgage. Fixed rate mortgages are those where the same interest rate and monthly payments are paid annually and throughout the term of the mortgage while adjustable rate mortgages are those where the interest rates on home loans in Laredo and monthly payments fluctuate periodically according to changing market conditions. Also, traditionally, there existed only two types of fixed rate mortgages and these were the 15 year mortgages and the 30 year mortgages. However, recently, longer term mortgages of either 40 or 50 years have been introduced for properties whose loan amounts was too high to be covered comfortably within 30 years. The most common type of fixed rate mortgage however, still remains to be the 30 year mortgage to date. This is because it has several benefits and these include:
You won’t be affected by changing interest rates- One major benefit of all fixed rate mortgages in general is the fact that you will not be affected by fluctuating market interest rates. This is because your interest rates will be fixed at the amount it was at the beginning of your mortgage’s term and it will remain the same throughout the term of your loan. You therefore pay the same amount no matter how high or low the interest rates go, giving you a sense of certainty and steadiness.
Low and easily affordable monthly payments- The amount of monthly payments is usually indirectly proportionate to the length of the term period of a loan. Therefore, taking up a 30 year fixed loan enables you to pay back your loan in very small and easily affordable monthly payments compared to one who takes a loan at a shorter term period. This makes the 30 year mortgage very affordable for even the low income citizens of Houston.
You qualify for a higher loan amount- Because your mortgage will be stretched over a long period of 30 years, you will be able to keep your debt-to-income ratio low and therefore qualify for a higher loan amount than someone who takes up a loan at a shorter term period. Maintaining a low debt-to-income ratio enables you to have more borrowing power as well. This will enable you to take up other types of loans should you need them for a different venture. These are among the benefits of choosing a 30 year fixed mortgage rate in Laredo over other shorter term loans.
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