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Keep in Mind the Following When Availing of Fixed Home Loans

Right after you have decided the home that you want to buy, you now have to look for a loan to refinance it to help you in buying your home. However, this should not scare you but this is the tricky part of it all. What makes it tricky is that there are many types of mortgages to apply to that can help you. And each of them could offer you different benefits—that is why you need to choose which is best.

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Keep in Mind the Following When Availing of Fixed Home Loans

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  1. Keep in Mind the Following When Availing of Fixed Home Loans http://fixedhomeloan.yolasite.com/

  2. Fixed home loans are getting more and more popular for borrowers nowadays. A fixed home loan, or a fixed rate home loan, is one of the many types of home equity loans available. Borrowers borrow the amount of their fixed rate home loansaccording to the amount of equity that is available for their property. An amount is specified and the borrower’s loan is approved. The low doc loan options often has a definite term and definite conditions for repayment. The funds derived from that loan can be used for many purposes that borrowers have in mind.  What is ultimately “fixed” in a fixed rate home loan is the interest rate; it won’t go up or go down. 

  3. Because interest rates are fixed in fixed rate home loans, there is now a host of advantages and disadvantages that come along. While there are very good benefits, it is important for borrowers to analyse both the advantages and disadvantages so that they can make an informed decision. So what are the advantages and disadvantages of fixed rate home loans? We shall discuss them here:

  4. Advantages of Fixed Rate Home Loans The most important advantage that fixed home loans can give borrowers is that for these types of loans, borrowers know exactly how much they have to pay every month. They will pay always a constant amount each month, regardless of whether the interest rate increases or decreases. If you are the one having to pay for a fixed rate home loan, at least you don’t have to worry that at some point in time the amount of your monthly payments will rise. They’re always fixed, in accordance to the fixed interest rate. Because of that it will be easy for you to plan your budgeting for the future.

  5. The interest rates that lenders usually offer for fixed rate home loans are slightly bigger than the current interest rates offered for variable rate home loans. For example, the current variable interest rate is 6%. The interest rate for a fixed home loan could be, say, 7.5%. At the start of the period for making monthly payments, you may be paying more than what a borrower of a variable rate loan will pay. However, over time, you will realize that you will be paying less. Suppose interest rates for variable rate loans suddenly jump to 9%? Then those with variable rate loans will have to contend with a bigger interest rate, while you stick to the 7.5%. Over time, you will be paying less than those who have variable rate loans in an environment where interest rates will have suddenly increased.

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