Fixed Rate Home Loan: Finding the Right Home and Mortgage
During a home search, you balance finding the right house and the right financing. There are several mortgage options. There are also several homes on the market. One mortgage to consider is the fixed rate home loan. Let’s also look at some tips to narrow your home search.
The Fixed Rate Home Loan
The fixed rate home loan consists of a fixed interest rate. The rate you lock in at the beginning of the mortgage is the same at the end of the loan. This is nice for those who enjoy consistency. There are no ups and downs during the mortgage’s life. Budgeting becomes simpler because there is little chance for surprises. With a fixed rate, there is less default risk because the rate cannot increase unexpectedly.
Some homeowners get a little antsy when they see that market interest rates drop below theirs. Keep in mind that rates usually do not stay down for an extended period of time. If they do, you have options like refinancing. For more details, speak with one of our professionals.
Narrowing Your Home Options
As you pick out your mortgage loan-type, you also need to narrow down your home options. Start with the neighbourhood. If you have children, living near schools makes the suburbs a good option. Those who are still single or recently married may be more comfortable living in an urban setting.
Next, pick the home-type. Single-family, multi-family and condos are three choices. The size and specifications may determine the home-type. If you have children, a backyard is often a requisite. Garage, a home office and kitchen island are other desirable features that determine the ideal home’s size.
At this stage of the home buying process, you are balancing desired home features with financing. You may be ready to purchase the two-story home with 4 bedrooms and a garage. In other cases, a starter home is a jump off point. For more advice, you can contact our team of financial experts.
Putting It Together
A fixed rate home loan offers stability. There are no surprises when market conditions change because your rate is locked in for the duration of the loan. If market conditions change too drastically against you, refinancing is on the table. You may incur fees, but a professional can guide you through the alternatives.
The total amount you need to borrow depends on the property’s price. Individuals who are prepared to give a down payment often borrow less, so a nice sized home is possible. First time home buyers may be able to afford less house, but have access to grants and other programs.
Fixed Rate Home Loan Conclusion
A fixed rate home loan has pros and cons, and it is one option. Every financial situation is different. Our Mortgage House team is here to help you navigate the home buying process.