Top Three Benefits Of Fixed Rate Loans
The Federal Housing Administration where the first to develop the fixed rate mortgage
. Due to it's unique benefits, fixed rate loans have become one of the most popular loans in America. However, if you are having some trouble deciding if a fixed rate loan is right for you, here are three of the top benefits of fixed rate loans
1. Lock: Unlike variable rate mortgages, a fixed rate loan 'locks'. This means that the interest rate on the note will remain the same through the loan. This is one of the major differences that attract many homeowner's to use fixed rate loans. Since the loan is locked the interest can't change, this let's the customer feel a little more at ease knowing that they won't have to suddenly pay more each month.
2. Loan Term: Whether you want a long or short term, a fixed rate loan allows you to choose what is desirable for you. While the most common terms are 15 or 30-year mortgages, shorter terms are also available and for those who want longer terms (such as those who live in high priced housing areas) 40 and 50-year mortgages are also available.
3. Prepayment: With a fixed rate mortgage there is often the option to prepay the principal early and without penalty. If you pay early, the total interest paid will reduce. This allows you to shorten the amount of time needed to pay off the loan!
While it may not be for everyone, a fixed rate loan can be a great benefit to many. If having a mortgage with a fixed interest rate and allows you to choose the length of the term desirable to you, then a fixed rate mortgage may be just what you are looking for.
by: Brian Nathans
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