Selecting the duration of a mortgage loan can be a complicated undertaking: There are many options to choose from, and the decision requires a great deal of organization and foresight. For those in need of advice, read through the following for some helpful information on how to choose the length of your mortgage.
How Long Do You Plan to Stay?
For those who are planning to buy their dream house, or at the very least a home they plan on spending a long time in, longer, fixed-rate mortgages may be your best bet. With this type of loan, you are locked in to one interest rate and, as such, you are not subject to increased payments when the market fluctuates. Furthermore, the level of stability that a fixed rate mortgage provides will allow you to plan and budget for the future. If, on the other hand, you plan on buying a home that does not have much longevity, a short-term, adjustable-rate mortgage might be best for you. With this type of mortgage, you are more likely to save money via the lower “introductory” rates typical of ARMs.
How Much Can You Afford Per Month?
Short-term rates will have lower rates than longer terms. However, shorter terms will only provide you with a shorter period of security as opposed to something like a 5 year fixed rate which locks away a marginally higher rate over a longer period of time to protect against small interest rate fluctuations. See below for some of the lowest rates in the market, making sure that your next mortgage payment is well within your means. The table shows a comparison between today’s Market Rate and the rate offered by Nelson Sousa:
For more advice on how to choose the best mortgage duration for you, call Axiom Mortgage Solutions. We can help guide you through the selection process and help you determine which loans you qualify for.
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