Fixed Rate Mortgage

People who are looking to find the best mortgage rates for their homes would commonly consider a fixed rate mortgage . There are two types of fixed rates, the 15-year and the 30-year mortgage rates. Compared to the Adjustable Rate Mortgage (ARM) which usually starts out with smaller payments but gradually increases over a certain period, fixed rates are just that, fixed.

But like a coin that always has two sides to it, a fixed rate mortgage has its advantages and disadvantages as well. The two major advantages for both types are the consistency in the monthly housing payments and the payment affordability it gives the borrowers when rates go low.

A 15-year fixed rate mortgage has its advantages over a 30-year fixed rate, which are:

Interest rates are much lower than the 30-year fixed rate mortgage which makes it attractive to more people because the inflation risk is lesser over a long-term.
Buyers are able to come up with faster equity because of the shorter period of payment it covers compared to the 30-year fixed rate mortgage
Total interest payments are significantly lower than the 30-year fixed rate mortgage.

The two main disadvantages are the higher monthly dues and the limitation it gives people in choosing a much larger house which can only be had when one is on a 30-year fixed rate mortgage.

Under the 30-year fixed rate mortgage , the buyer has:

Monthly dues or payments which are much lower than the 15-year fixed rate mortgage because of the longer period of amortization.
The buyer gets the opportunity to loan money for a longer period while the interest remains the same and the dues do not change as well in a fixed rate mortgage.
Borrowers become more flexible with their money for more investment opportunities outside of their home properties as the lower monthly dues for a fixed rate mortgage remain steady.

The primary disadvantages in a 30-year fixed rate mortgage include a much higher total interest bill due to the long-term coverage, a much higher interest rate, and a much slower equity build up because of the long-term amortization coverage.

Recent mortgage rates have been at their lowest which makes it ideal for people to grab this opportunity at getting the best deal they can have whether they choose ARM or a fixed rate mortgage .

The best way to determine which of these rate types (ARM or a fixed rate mortgage will work best for you is to consider both external and internal factors such as your credit score that will boost or lower down your chances at getting a favored lender's rate options, your long-term payment plan, your income and asset stability as well as with your willingness to take the risk that will come along with your choice.

If you decide to go for a fixed-rate mortgage, make your plans more specific and long-term as external factors like financial market trending, market location, and federal and national laws or policies may affect the stability of any long-term financial investments or risks that you will have like mortgages.

For borrowers who prefer a conservative mortgage financing solution. It provides the security and stability of fixed mortgage payments for clients who plan to stay in their homes for the long term.

RHMC combines the expertise and comprehensive array of mortgage products offered by large national banks with a culture that prioritizes unparalleled personal service. We are large enough to offer any product our clients could imagine, yet small enough to maintain the personal touch our clients expect.

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