Benefits of 30-Year Fixed Coral Springs Mortgage Rates
At NHL Lending, we offer residents of Coral Springs mortgage rates that remain fixed for a period of 30 years to borrowers who meet our guidelines. There are many reasons why a homeowner would opt for a 30-year fixed mortgage rate instead of saying, for example, a 15-year fixed mortgage rate or even an adjustable rate mortgage.
The biggest advantage you gain from a 30-year fixed mortgage rate is the predictability and stability. When paying for a fixed mortgage your monthly payments will stay the same for the length of the mortgage. You do not have to be concerned about your interest rates changing from year to year.
The only disadvantage you might have is that you will end up with a mortgage rate that is high which means that you will end up paying higher interest in the long term.
Over the years, a 30-year fixed mortgage rate has become the most popular option for homebuyers. When compared to how much other home mortgage rates are preferred, this type of mortgage is ranked at the top.
The question to ask though is, why is the 30-year fixed mortgage rate so popular? Are there any drawbacks? What about benefits?
Defining A 30-year Fixed Rate Mortgage
This type of loan has a repayment term of 30 years and comes with a fixed interest rate that does not change over the course of that whole period. The interest rate on the 30-year fixed mortgage is the feature that stands out the most. It is also its greatest benefit.
Once you qualify for a 30-year fixed mortgage, you can expect to pay the same mortgage rate over the entire term of the mortgage unless you refinance or sell your home.
Now that we have the definition out of the way, it is time to cover the advantages as well as some drawbacks you can expect when you get the 30-year fixed mortgage rate.
Why You Should Get A 30-Year Fixed Mortgage Rate
Has Payment Stability
One of the key components of a monthly mortgage payment is the interest rate. When you think of the acronym PITI (Principal, Interest, Taxes, Insurance) this becomes quite evident. Because your interest rates will not change over the term of the loan, you can always expect to pay the same amount and that makes creating a budget for your home expenses easy.
This is a huge advantage, especially when contrasted against adjustable rate mortgages. With adjustable mortgages, the borrower’s interest loan varies from one year to the next. This can be a source of unpleasant surprises. Adjustable rate mortgages can adjust either downwards or upwards. Your mortgage rate might actually become more expensive over time.
Reduced Monthly Payments
When compared with mortgages that cover a shorter term, you can expect to pay low monthly payments. When you choose a 30-year fixed mortgage rate your monthly payments are spread out over a longer period of time, which in effect reduces how much you pay every month.
30-Year Fixed Mortgage Drawbacks
Before applying for a 30-year fixed mortgage there are a couple of things you need to know. Even though they might look like huge disadvantages, when examined in context they are not as big of a drawback as they might seem.
5/1- Year ARM
Fees and Points
One such disadvantage is that the borrower might end up paying a higher interest rate over the term of the loan. However, when you think about it this is quite reasonable, it is a small price to pay for the predictability and stability of your Coral Springs mortgage rates.
The above figures reflect Freddie Mac’s mortgage rates in February of 2017.
According to an , adjustable rate mortgages were responsible for fueling a significant portion of the housing crisis of 2007. The thing with a 30-year fixed mortgage is that even though the cumulative interest rates might be high, chances of a foreclosure are definitely lower than with an adjustable rate mortgage.
The peace of mind you get from a fixed rate mortgage is definitely worth the higher interest rate.
The other disadvantage is the length of the term of the loan. The total cost of your loan automatically increases when you get a 30-year fixed mortgage rate. Though the difference might not be immediately apparent, you will notice it when you do a comparison with a 15-year fixed rate mortgage rate.
Of course, if you choose to go with a 15-year fixed mortgage you will have to contend with making higher monthly payments since the term of the loan is not spread on a shorter amount of time relatively speaking.
You need to take note of the fact that many people either refinance or sell their homes before the 30-year term expires.
If you would like to get the best Coral Springs mortgage rates for your home get in touch with NHL Lending.