One of the most common and popular mortgage loans is a low fixed rate mortgage. These loans are common as they have a lower interest rate that is set at a certain amount and never changes for the duration of the loan, or a time period set by the lender. Another reason this type of loan is so popular, especially with first time home buyers, is that you know exactly how much your payments are going to be every month. This will help you to make sure that you have enough money to pay your loan every month.
A low fixed rate mortgage remains the same no matter what the national rate goes to. For example, if a lender gives you a fixed rate at 5% for 15 years, this rate will stay the same no matter what the national rate goes to. If the national rate goes up to 7% then you will still be paying the initial 5%. Also, if the national rate drops to 4% you will still end up paying the 5% that was initially agreed upon. While this is great if the national rates stay high, it can be a bit tough if it drops below the rate you are paying already.
Unlike a low fixed rate mortgage, an adjustable rate loan will change as the index rate changes. These normally rise and fall with a national average that is acceptable for most people and lenders. These are usually for vehicle and personal loans, but you can get mortgage loans that are adjustable as well. While adjustable rate loans are also common, most people would prefer to get the fixed rate loans as they will always know exactly how much they will have to pay every month and can plan accordingly.
The low fixed rate mortgage loan is fairly easy to get if you have good credit. You can get a decent low interest rate and not have to worry about paying any more than you should, and this makes people very happy. For first time home owners, this can mean the difference between having a home and renting a home. You will still have to have some kind of asset to put up against the loan, or you can come up with an initial down payment that is equal to around 15% of the loan that you are seeking to get. This will ensure that you are able to repay the loan back.