FIXED-RATE HOME LOANS
Fixed-rate mortgages are the most common type of home loan in the country. They offer consistency, predictability and protection from future increases in interest rates and monthly payments.
Here at Premier Nationwide Lending of Goose Creek, Sonya Pitt is proud to offer a wide-ranging selection of these reliable mortgage loans, including fixed-rate FHA, conventional, USDA and VA options. No matter what your budget, preferences or Goose Creek homebuying needs entail, we’ve got the fixed-rate mortgage loan to help.
FIXED-RATE LOANS: WHAT THEY ARE AND WHEN TO USE THEM
As the name suggests, fixed-rate mortgage loans come with a fixed — or set in stone — interest rate. That means the interest rate you qualify for when you close on the loan remains your interest rate the entire time you hold the mortgage. This protects you from inflation and changes in interest rates, and it offers a consistent, predictable monthly payment over time.
Fixed-rate mortgages typically come with higher interest rates than their adjustable-rate counterparts, at least for the first few years of the loan term. The only way to change your rate on a fixed-rate loan is to refinance it.
THE PROS AND CONS OF FIXED-RATE MORTGAGES
Fixed-rate mortgage loans come with a number of advantages, as well as a few drawbacks. The biggest upside to using these loans? That’d be their consistency and predictability. Because they come with a pre-established, unalterable rate, it makes it very easy to budget for your monthly mortgage payment. This set-in-stone rate also protect Goose Creek homeowners from inflation and other economic fluctuations that might occur.
There are downsides, though. For one, the ability to lock in a rate for decades is only good if rates remain steady or increase. If rates drop, then you’re paying more in interest than you really need to. Another drawback is that fixed-rate loans come with higher interest rates — at least up front — when compared to adjustable-rate mortgages.
Let’s sum these pros and cons up:
Pros:
- Consistent interest rate for the life of the loan
- Easy to budget and plan for
- Protects you from market fluctuations
Cons:
- Higher interest rates than other loan options (at least initially)
- Higher monthly payments than other loan options (again, initially)
- Will require refinancing to lower your rate
WHEN IS A FIXED-RATE MORTGAGE THE RIGHT MOVE?
Fixed-rate mortgage loans are generally best reserved for longer-term homebuyers — Goose Creek residents who plan to stay put in their homes for the long haul. They can also be a good move if you have inconsistent or unpredictable income, as it can give you a reliable and unchanging monthly payment for which to budget for.
If you’re not buying your forever home and only plan to stay on the property a few years, at most, then a fixed-rate mortgage might not be the smartest move. In this scenario, you’d be better off with an adjustable-rate loan that can give you lower rates for 3, 5 or 7 years.
QUALIFYING FOR A FIXED-RATE MORTGAGE LOAN
Your eligibility for a fixed-rate mortgage will depend on several factors. These include your credit (score and history), your employment situation, your monthly debts, your income and the exact type of mortgage loan you’re applying for. VA, USDA, FHA and conventional loans all come with different requirements, so speak to Sonya Pitt and learn more about the requirements you’ll need to meet for your home loan.
SHOULD YOU USE A FIXED-RATE LOAN?
Are you unsure if a fixed-rate mortgage loan is the right move on your homebuying journey? Our Goose Creek mortgage office is here to help. Contact Sonya Pitt today for guidance.