Building or buying a home is a project that causes some people to begin a collection of scribbled sticky notes and carry a steno book filled with phone numbers, estimations and possible combinations of loan terms and monthly payment schedules. The maze of paper produces valuable information to help with options, but there comes a point when the inevitable choice of which loan to use must be made. Circumstances sometimes determine the loan and other times the buyer has several options that will work to the best advantage. Between a Delaware Fixed Rate Mortgage (FRM) and its counterpart, the Adjustable Rate Mortgage (ARM), several advantages distinguish the FRM as a good choice. Predictability is the hallmark of a Delaware Fixed Rate Mortgage, a home loan which has a pre-set interest rate and thus a monthly payment that does not fluctuate during the entire course of the loan. Unlike Adjustable Rate Mortgages, Fixed Rate Mortgage interest rates cannot go up once they are set. Taking advantage of lower interest rates makes this a plus; but if rates go even lower, the loan would have to be refinanced to take advantage of them.
Fifteen year Delaware Fixed Rate Mortgages will be paid off quicker, and will have lower interest rates than a 30 year loan. The trade off for the better rates is higher monthly payments than a thirty year mortgage. Shorter terms mean more equity in a shorter span of time. Home equity can be used to renegotiate better terms and rates for a refinance if conditions change. Delaware Fixed Rate Mortgages with thirty year terms are written with a lower interest rate, translating into lower monthly payments that are made over a longer span of time. Obviously, it also follows that the rate of building equity in the home is slower than with a fifteen year mortgage. Lower interest rates are locked in and cannot be changed. Locking interest rates in on a Delaware Fixed Rate Mortgage when they are low is an advantage only if the rates do not sink lower still after the loan is set. So when the time comes, choose wisely!
For more information, visit Stonebridge Mortgage online 24 hours a day 7 days a week at www.stonebridgemortgage.com. Our knowledgable officers are available to assist you with all of your financing needs.
Comments(1)