Fixed Rate Mortgage
- Even if mortgage rates increase astronomically, your interest rate is locked in and your monthly payments won’t change.
- Knowing how much you need to put aside for your mortgage payments every month for the next 15/30 years is incredibly helpful when it comes to budgeting for the rest of your expenses.
- The fixed rates make it easier to shop around for loans, because you can simply calculate your monthly payments and make the best choice.
- Timing can be your worst enemy when it comes to locking in your fixed rate on a mortgage loan; you may feel you’re getting a low rate at closing time, but a few months down the line the rates may drop further and you feel trapped.
- If you do choose to refinance, you may end up paying thousands in order to do so, and may ultimately cost you more money.
- Fixed rate mortgages generally have higher interest rates than ARMs, and if you end up selling or refinancing in the first few years, your interest payments would have been greater.
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