Fixed Rate Mortgages – The Benefits
This article discusses how a fixed rate mortgage can assist you in planning your finance over the next few years. A fixed rate mortgage can help you to get rid of financial worries associates with mortgage payments as the payment you make is fixed over a number of years
As the interest rate that you are charged for a mortgage remains the same for a fixed amount of time. Thus, your budgeting becomes very easy since you can easily plan by knowing exactly how much your monthly repayment will be. These mortgages are good especially for people who have steady jobs. Many graduates apply for fixed rate mortgages when buying their first home. They have a clear idea of how much money to pay for a period of time. They can accordingly formulate a budget that suits their needs and circumstances.
Many reputed lenders help people buy their first home or remortgage from their existing l mortgage lender. They arrange fixed rate mortgages that are specific to each client so that their clients can easily meet their financial obligations.
It is important to understand that each one of us faces different circumstances and have different needs. Therefore, the experts work out suitable range of fixed rate of mortgages for the customers. Qualified mortgage professionals can guide you with their expertise in deciding the best fixed rate mortgage plan available for you.
Fixed rate mortgages are helpful especially for the first time buyers or those who are looking for some stability by working out some fixed monthly repayments.
Where other mortgages may increase depending on the base rate, you can rest assured that with a fixed rate you know the precise amount which you will be repaying on a month-to-month basis. This is irrespective of any change in the interest rates since fixed rate mortgages are unaffected by them.
As with any financial commitment or major investment you must talk to a professional adviser or financial planner. You will be undertaking long-term and major commitment which you must adhere to. If you do not keep up your repayments then you stand to lose your house and everything you have paid towards it so get sound advice before you go too far down the house buying track.
A financial planner or mortgage broker will have years of experience helping people just like you so they understand your situation. They undergo regular training too so they are up-to-date with the latest in borrowing techniques and also, tax implications.
Further, they have access to many different sources of investment and borrowing. Often these funding sources are not the obvious banks and are generally unknown to the general public. However, because a mortgage broker puts a lot of business in the direction of some lenders it means they are in a position to negotiate better rates, terms and even subsidies in the form of legal fees and the like. This means they can find the best rates or deals available to you to help your house purchase.
Even having completed your budget assessment and worked out all of your living expenses, and then checked to see if you can afford repayments of a fixed mortgage, you are still best advised to talk to a mortgage broker.
Also bear in mind that at the end of the fixed term, the rate will probably switch to the current floating rate at that time. Of course we do not know if that will be higher, lower or the same. But you must give some consideration to the affordability of the mortgage at the end of the fixed period.
Again a mortgage broker will be able to demonstrate a few different repayment scenarios at a range of interest rates. This sounds like a boring exercise but they have software tools which make it very simple and quick. It is definitely worth asking your financial planning adviser to run a few different budgeting situations for you.