If you are considering going in for a home loan, you might want to look at the option of going in for a 30 year fixed interest mortgage. Presently the mortgages are quoting at the lowest rates and have been steadily falling. But then soon it might start increasing too. There are several websites that you can check for the daily average mortgage rates in the US. Then you will get an idea.
It is important for you to understand the two main types of mortgage loans namely fixed rate mortgage and flexible rate mortgage. In a fixed rate mortgage throughout the tenure of the mortgage period, the rate of interest remains fixed and does not change where as in a fluctuating mortgage; the rate of interest varies with the market conditions and the demand.
Fixed rates of interest mortgages are always preferred by those who intend staying at their homes for more than five years and are taking a longer tenure on their loan. They prefer to have fixed repayment without having to keep watching out for any increase in rate of interest and increased installments.
The fact with the fixed rate loans is that the rate you will see is slightly higher than the current flexible rate. But then over a longer period you will find the fixed rates to be cheaper as the flexible rates are market driven and might increase substantially too. But the fixed rate mortgage may not be attractive for those who wish to close the loan within five years or so.
Housing sector is considered to be one of the priority sectors and therefore Federal Reserve has spent over a trillion dollars in mortgage backed securities to ensure that the rates of interests are kept lower in the market. Thereby they are trying to ensure that the benefits of home loan availability is extended to a larger section of the society.
Today in the market you may not be able to apply for a sub prime interest rate loan, for the rules of eligibility and sanction have been made very strict. If you are applying for a home loan with a standard rate of interest then only you can hope to get a loan. It is also important for you to have a good credit rating too.
However if you search the market extensively you might find some lenders who are willing to lend at below market rate of interest too.
You might take the initiative to search and find such lenders but then be careful and go through their other terms and conditions to understand what you are getting into.
It is important for you to understand the two main types of mortgage loans namely fixed rate mortgage and flexible rate mortgage. In a fixed rate mortgage throughout the tenure of the mortgage period, the rate of interest remains fixed and does not change where as in a fluctuating mortgage; the rate of interest varies with the market conditions and the demand.
Fixed rates of interest mortgages are always preferred by those who intend staying at their homes for more than five years and are taking a longer tenure on their loan. They prefer to have fixed repayment without having to keep watching out for any increase in rate of interest and increased installments.
The fact with the fixed rate loans is that the rate you will see is slightly higher than the current flexible rate. But then over a longer period you will find the fixed rates to be cheaper as the flexible rates are market driven and might increase substantially too. But the fixed rate mortgage may not be attractive for those who wish to close the loan within five years or so.
Housing sector is considered to be one of the priority sectors and therefore Federal Reserve has spent over a trillion dollars in mortgage backed securities to ensure that the rates of interests are kept lower in the market. Thereby they are trying to ensure that the benefits of home loan availability is extended to a larger section of the society.
Today in the market you may not be able to apply for a sub prime interest rate loan, for the rules of eligibility and sanction have been made very strict. If you are applying for a home loan with a standard rate of interest then only you can hope to get a loan. It is also important for you to have a good credit rating too.
However if you search the market extensively you might find some lenders who are willing to lend at below market rate of interest too.
You might take the initiative to search and find such lenders but then be careful and go through their other terms and conditions to understand what you are getting into.
About the Author:
Get more pieces of work written by this author about topics such as 30 year fixed mortgage rates and US bank mortgage rates.
No comments:
Post a Comment