What Is a Fixed Rate Mortgage?
Fixed rate loans are considered the safest loans because the rate and payment never change. While rates can be lower on adjustable-rate mortgages (ARM), there is a point in the term of the loan where it converts to an adjustable loan and the interest rate is subject to yearly changes. Although rates have been low, and adjustments have kept the ARM loans with a lower interest rate, this might not be the case in the future as pundits believe interest rates will rise.
The Benefits of a Fixed Rate Mortgage in Westlake Village, CA
Since the interest rate on these types of mortgages is fixed, borrowers have peace of mind knowing how much their payment will be each month. Searching for a new property to buy knowing the type of home loan you qualify for will help you forecast your financial situation as well. The main benefit of securing a fixed rate mortgage in Westlake Village, that you are protected from sudden and significant increases in interest rates.
How Does a Fixed Rate Mortgage Work?
Fixed rate loans can be made with loan terms from 8-30 years. The shorter the loan term, the faster you pay off your loan. However, a shorter loan term means a higher monthly payment. For those who want the option of the lower payment on a 30-year fixed rate loan but with a shorter term, consider adding an additional mortgage payment each year. Making one extra payment per year on a 30-year fixed rate mortgage can cut the term down to 22-23 years. This is a highly recommended way for paying off your loan sooner. Standard fixed rate terms, and how loan rates are priced, are based upon 30-, 25-, 20-, 15-, and 10-year fixed rates.
Why Choose Elite Financial?
At Elite Financial we always prefer the safety of a fixed rate mortgage in Westlake Village, and we have many term (length of loan) options from which to choose to help pay off your loan earlier. If you plan on keeping your home for a short period of time, an ARM is an excellent way to save money monthly on your loan. If you want to play it safe, and plan on staying in your home for a longer period of time, we highly recommend a fixed rate mortgage in Westlake Village, CA. And if you can live with a shorter term, or make extra principal payments, you will save a lot of money over the term of your loan. To review the best loan options to suit your needs, contact Elite Financial today for a no-obligation consultation