When considering their monthly repayments, many people considering buying a home look into 30 year or 15 year fixed mortgage rates. No-one wants a mortgage hanging around their neck forever but with home buyers entering the market later, an early repayment of this loan is important. It may take some time to reach a decision as there are many things to contemplate. Ensuring the repayment remains the same throughout the mortgage term is very important.

It seems that some lenders are happy to offer deals that appear too good to be true and they usually are. Loans agreed with a 15 year fixed mortgage keep the same interest rate throughout the entire life of the agreement.

This is always a good thing for those people that do not like surprises. My wife and I had already decided to research long term fixed mortgage rates when we started looking at homes for sale.

Having a realistic, sustainable monthly payment on our mortgage was important even though we wanted to pay off our debt as soon as possible. This meant we had to consider 30 year fixed rate mortgage plans as well as those of 15 years.

Still, having a mortgage close to retirement was not what we were looking for, so we decided to try for a loan with a 15 year fixed mortgage. There was obviously very good reasons to finish paying the loan off early.

After taking everything into consideration we decided on a 30 year loan instead. There were many things that factored into this decision. Finding out my wife was having a baby made making the choice so much easier!

Her regular monthly income would become unreliable because she wanted to be at home raising our child. Our monthly payment would have been too high if we had committed ourselves to the 15 year fixed mortgage plan. For us it just was not feasible as we would just be in over our heads. A thirty year loan brought the monthly payments down to a reasonable level.

If we have spare cash throughout the year then we can use it to reduce the capital sum. By doing this you can also reduce the term of the mortgage by quite a few years. This is well worth it in the long term but it does require some discipline. Our first choice would have been to go for the short term 15 year fixed rate mortgage solution but this did not help with our more immediate situation. As it is, things worked out very well for us by taking this route.

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This entry was posted on Wednesday, July 23rd, 2008 at 1:21 am and is filed under Debt Consolidation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.