The monthly payments for 30 year or 15 year fixed mortgages are the main considerations for many people who are looking to buy a home. Buying a home later in life means that many people want to have the mortgage paid off early. Take some time to think about everything carefully before any agreement is signed. Ensuring the repayment remains the same throughout the mortgage term is very important.
If you are offered a deal that appears to be too good to be true than it probably is. Interest rates remain the same throughout the life of the loan for 15 year fixed rate mortgages. There are no hidden costs involved with this type of plan which is great for many people that want a regular monthly payment. My wife and I had already decided to research long term fixed mortgage rates when we started looking at homes for sale.
Even though it was important for us to pay off our loan at the earliest possible opportunity, we did not want high, unrealistic monthly payments which we would have trouble maintaining. So in consideration of this point we also looked at longer, 30 year fixed rate mortgages as well. The problem was that we were not very happy about having a mortgage close to when we both retired so it was our hope a 15 year fixed mortgage rate would still be available to us. We felt that there was a great deal of emphasis on paying the mortgage off early.
Eventually we decided on a 30 year loan after looking at all the other possibilities. There were many things that lead us into making this choice.Discovering my wife was having a baby was the most important reason. Her regular monthly income would become unreliable because she wanted to be at home raising our child. The problem we could see was the increased financial commitment on a monthly basis if we had opted for the 15 year fixed mortgage rate. For us it just was not feasible as we would just be in over our heads. The monthly payments on a 30 year loan were quite a bit lower.
Making a few additional lump sum payments during the year helps bring down the amount owed. Those few extra payments also help reduce the number of years you have to pay the loan over. It may be easier said than done, but this approach does pay off eventually. Although we would have much preferred a loan with a 15 year fixed mortgage rate we had to take our needs and abilities into consideration. Things worked out well anyway, even though we were unsure about it to start with.
Author is an executive at Integra Global Solutions http://www.integraoutsourcing.co.uk, which provides cost effective accounting bookkeeping outsourcing services for 100s of accountants in UK, Ireland & Europe. For more details log on to http://www.integraoutsourcing.co.uk/casolution.html. You are free to publish this article as long as you have a link back to http://www.integraoutsourcing.co.uk/casolution.html
