Whether you’re a first-time home buyer or looking to renew your current mortgage, the process of choosing a mortgage can raise a lot of questions. Open or closed? Fixed or variable? At Interior Savings, our goal is to take away the guess-work with straightforward advice and flexible options. We’re proud to offer some of the best mortgage rates around and our Mobile Mortgage Specialists can help you navigate the nuances.
Mortgage rates fluctuate with the rise and fall of the market. Oil prices, unemployment, and many other factors can impact the market, but over the past several years, these rates have been fairly stable. When choosing between a fixed or variable mortgage rate, the stability of the market can play a big role in helping you make your decision.
Fixed Mortgage Rates
With a fixed-rate mortgage, your interest rate and payments are fixed for the term of your mortgage. That means that regardless of whether market rates rise or fall, you’ll have peace of mind that you’ll pay the same amount each and every month. In addition to easing budgeting woes, you can settle into a secure rate that’s calculated when you first set up your mortgage and are protected from interest rate increases.
One downside to a fixed rate is that the interest rate is often higher than variable-rate mortgages; this gives the lender more financial protection if rates go up. You can also face penalties if you choose to break your mortgage before the full term is up.
Variable Mortgage Rates
If you choose a variable-rate mortgage, your interest rate will fluctuate with the rise and fall of the market. While interest rates are typically lower with this type of mortgage, you have to be ready to take a risk to get the reward. Figure out if you’re financially prepared for interest rate increases by taking a look at your current income, earnings and savings.
The good news? If market interest rates go down, you’ll end up paying more off your principal and won’t face as severe penalties if you choose to break your mortgage before the end of the term.
How Do I Choose?
It comes down to what works best for you and the amount of risk you’re willing to take. By understanding your options and carefully assessing your current financial situation, you can build a mortgage plan that you can feel good about—and we’re here to help!
If you’re ready to get started, don’t hesitate to reach out to one of our Mobile Mortgage Specialists.