The major advantage of a fixed rate mortgage is that it presents a predictable housing costs for the life of the loan. A fixed rate mortgage guarantees that your interest rate stays the same, which means that your monthly principle and interest payments through the entire term of the mortgage remain unchanged. With a fixed rate mortgage, your monthly payments would only increase due to increases in property taxes or insurance rates.
A fixed rate mortgage allows you to budget accurately and enjoy lasting peace of mind. Knowing that your mortgage payment will remain the same month after month allows you to plan for lifes other pleasures, like vacations, college educations and retirement. It's pretty simple, if you don't like risk, then a fixed rate mortgage is right for you.
If the interest rates rise above the fixed rate on your mortgage, you will see the real benefits of the fixed rate mortgage. You can use a Fixed Rate Mortgage to finance primary residences, second homes or investment property, or to refinance your current mortgage. You always know that no matter what happens with interest rates, your payments won't change if you've used a fixed rate mortgage.
In general, fixed rate mortgages are seen as the safer alternative to an adjustable rate mortgage. An ARM is considered riskier than a fixed rate mortgage because your payment may change significantly. If you have an ARM, it may be best to lock in a fixed rate mortgage now, in advance of your current loan adjustment.
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why wont my bank allow my request to refinance my 2nd mortgage to lower interest. we are not asking for cash out, we have never been late in payment. bank is offering equity line of credit, with arm. originally this 2nd mortgage was heloc/arm. why should we go back? been there, done that.
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