30 Year Fixed Mortgage Rates

February 1st, 2011

Advantages of Fixed Rate Mortgages

Fixed rate mortgages are immensely popular among home buyers in the US when the prevailing interest rate is low. During the recession, interest rates sustained severe hits, pushing the cost of mortgages down. However, the uncertainty in the economy and financial crunch also resulted in dramatic reduction in salaries. Several companies took to mass lay-offs and this further added to the uncertainty in all segments of the economy.

As the economy is slowly finding its feet once more and job security is registering an improvement, there is a renewed interest in the housing market. The good news for prospective home buyers is that the upturn has not yet made a significant impact on interest rates, leaving them at subdued levels even now. This presents a wonderful opportunity if you are looking to buy your dream home with a mortgage loan.

Insulate Yourself Against Future Interest Rate Hikes

By taking a fixed rate mortgage in this current low interest climate, you can insulate yourself against future increases in interest rates. By doing so, you can save a significant amount of money, especially if the rates increase substantially over the next few years. You will get maximum protection as well as the greatest impact of such savings when you opt for long term mortgages such as 30 year fixed mortgages.

Know Your Monthly Outgoing in Advance

A fixed rate mortgage is the easiest loan to keep track of. The monthly outgoing you need to make towards this loan is known right at the time when you take the mortgage. You can plan for this payment well in advance and perhaps even set up a separate account from where this payment is made every month.
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15 Year Fixed Mortgage Rates

February 1st, 2011

How to Find a Great Fixed Mortgage Deal

In the current economic climate, fixed mortgage deals are highly preferred by prospective home buyers in the US. These deals allow buyers to lock in their interest rates at the prevailing low levels. Even if the rates do rise in the future, the buyer still has to pay the same 30 or 15 year fixed mortgage rates that are fixed currently. The cost savings that this affords make fixed rate mortgages a good option for those who would like to keep costs within a well planned budget.

There are many mortgage lenders in the market and finding a fixed rate mortgage that suits all your needs perfectly and gives you the best rate in the market can be a challenging task. Here are some ideas you can use to make sure your you get the best deal on a fixed mortgage.

Keep Your LTV Low

The loan-to-value ratio plays a very important part in determining the overall cost of your fixed mortgage loan. The LTV makes a comparison between the total value of the house you want to buy and the total loan that you want to apply for. For example, you want to buy a house that has a price tag of £100,000 and you can pay cash deposit of £10,000. Your mortgage loan should cover the rest of the price, that is, 90% of the home’s total value.

Typically, lenders offer the best 30 year or 15 year fixed mortgage rates when you have a higher stake in the property in the form of a larger cash deposit. This reduces your LTV and consequently the total amount you need to take as personal loans. Keeping your LTV below 75% gets you the best rates in the market.

Select Your Mortgage Term with Care

In selecting the mortgage term you are most comfortable with, there are many different aspects to consider. The longer your mortgage term, the greater the period over which you are burdened with debt. On the other hand, a loan that is spread over a longer term entails lower monthly installments. This means that your recurring financial outgo is significantly reduced, allowing you to manage the payment easily, albeit for a longer duration.
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10 Year Fixed Mortgage Rates

February 1st, 2011

Why Fixed Rate Mortgages are Ideal for First Time Buyers

Buying a house is not an easy task and the process is made even more difficult because the buyer also has to find the perfect mortgage to pay for the purchase. For the uninitiated first time buyer, understanding various mortgage loan options and identifying the ones that will suit his needs can be time and effort consuming. There are a number of fixed and variable rate options in the market and both have their own advantages. However, for a first time buyer, fixed term loans are the best suited.

Easy to understand loans

Fixed rate mortgages are simpler to understand than variable rate ones. As the name suggests, fixed rate mortgages come with a pre determined rate of interest that remains unchanged even if market interest rates change. In effect, your interest rates are insulated against market fluctuations.

It is important for you to know that this fixed interest period lasts for a specified number of years during the initial term of the loan. Beyond this point the rate may switch to the SVR (standard variable rate) of the lender. Your lender’s SVR need not necessarily be the same as the base rate. For instance, your lender can set his rates at base rate +1% or however else he chooses.

Easy to budget for

Unlike a variable rate loan, the rate of interest you will be paying over the initial fixed rate period is clearly known to you right at the time when you take the loan. For example, your 10 year fixed mortgage rates may be set at 4% for the first two years. At the end of two years, the rate switches to the lender’s SVR of 4.2%.
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