A home is a very big purchase for most individuals and families, so planning how to address the payments and the ongoing cost of home ownership is an important step. While comparing 30 year fixed mortgage rates, it is also a great idea to review the benefits of the 30 year fixed mortgage as compared to other loan options.
While 30 year fixed mortgage rates are slightly higher than the rates for a 15 year fixed or for some of the initial payments on an adjustable rate mortgage or ARM, there is also the predictability and security for the home buyer in understanding what the mortgage cost will be for entire 360 months of payments.
This predictability is not possible with the ARM loan options where, after the initial set rate period of the loan, they will adjust on a regular basis. This can create payment increases that may make keeping current a challenge for some homeowners if interest rates suddenly spike in the future.
With the 30 year fixed rate loan, the monthly payments will be lower than with the 15 year as the loan is spread out over twice as long. This is not half, but the payment will be typically at least one third less, which may allow home buyers to upgrade their home without any risk to their financial security.
Of course, the 30 year fixed mortgage rates do not change, so it is easy to calculate just what will be paid to interest over that term. Keep in mind, if interest rates drop significantly, homeowners will always have the option to complete a refinancing loan, choosing perhaps a lower rate 30 year fixed, a 15 year fixed or even an adjustable rate mortgage to drop their monthly payments.
The 30 year fixed mortgage rates offered at Guaranteed Rate are highly competitive with other online or conventional lenders. To compare our rates, visit Guaranteed Rate online.
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