When a home buyer establishes fixed NY mortgage rates, the buyer knows well in advance what all the future payments will be up until the mortgage has been fully satisfied. Because the mortgage rate is fixed from the beginning, payments will not vary during the duration of the loan.
A fixed rate mortgage allows you to determine how long it will take to pay off the principle of the loan plus the interest, this calculation arrives at a fixed monthly payment over a specific period of time. You will not pay any more than the initially calculated payment. In the event you sell your home prior to owning it outright, the proceeds from the sale are used to pay off the mortgage; the balance goes to the original borrower.
The industry normally offers two primary types of fixed rate mortgages; 30 year and 15 year terms. It is possible to arrange shorter term mortgages such as 10 or 20 years but they are not popular with the industry.
The advantages of fixed NY mortgage rates:
The advantage is very simple, you will know well in advance what your payment is and you can budget for it accordingly. Regardless of where the interest rates go; up or down, your monthly payment stays the same. This is not the case with variable rate mortgages and other mortgages that pose some risk.
The disadvantages of a fixed rate mortgage:
Because lenders do not have crystal balls and they cannot accurately forecast the cost of money over the next 15 or 30 years, the monthly mortgage payment is often times higher. The downside of knowing what your payments are is that they may be higher to provide some degree of protection to the lender.
Is a fixed rate mortgage good for you?
Although it is recommended that you discuss your options with a mortgage professional, a fixed rate mortgage is usually the best if:
1. Interest rates are low
2. You can afford the payment
3. Your budget allows for unknowns such as repairs and necessary maintenance
4. You are planning on keeping the home for a long time
To get the best NY mortgage rates you have to shop around. Approach a number of different lenders and ask for their offer. Bear in mind that fixed rate mortgages have a number of fees built into the final payment.
If you are a union member you can avail yourself of no fee NY mortgage rates. Call Members Mortgage Corp. for further details.