If the interest rates jumping is what holds you back from getting a mortgage, a 20-year fixed mortgage loan might help you put those second thoughts to an end. For 20 years, your interest rate will remain the same while you pay off your home/land sooner than you would by going the traditional route.
If you want one of the simplest approaches to buying a home while ensuring your interest rate stays the same, you might want to pay attention to what we have to offer you today.
The Basics of 20-Year Fixed Mortgage Loans
This type of mortgage isn’t like others such as a variable rate fixed mortgage which ends up having interest rates that change as fast as the market changes. You can finance a home purchase with a fixed interest rate for the term of the loan.
Your initial loan plus interest is spread out over 20 years, as well as any other fees (such as insurance and property taxes) that the lender requires. You will be subject to a credit check and down payment to secure this type of home loan.
How can one benefit from a 20-year fixed mortgage?
This is a common question to ask, and there’s no reason why it shouldn’t be. Here are the answers that you seek to help you form a valid opinion for yourself.
· Approval could be easier than it is with other mortgage loans.
Especially if you choose to go with a government-endorsed lender (such as Fannie Mae). Not only will it be easier to gain approval, but the fees associated with financing tend to be cheaper than it is with other lenders as well.
· Lower interest for a longer period of time, at a fixed rate.
For 20 years, your interest rate will not be changed. This is the full life of the mortgage which ensures your new home is paid off quicker than if you were to go for another 10 years which is what a majority of homeowners tend to sign up for.
· Your investment could grow better than other types of investments.
Think of it as a savings account, but your payments go into the home that you live in which will grow in value over time. You could implement other financial planning strategies as well to ensure you get the most financial gain possible.
Keep in mind that there are other opportunities as well when it comes to embracing what a 20 year fixed mortgage has to offer. It’s something that will provide you with great benefits if you take the time to dive into it a little bit deeper.