Why Is Fixed Rate Mortgage A Popular Option Among Mortgagors?

A fixed rate mortgage or the FRM is a type of mortgage loan that offers the same interest rate all throughout the loan term. The other type of mortgage loan is the adjustable rate mortgage. In this type of mortgage, the interest rate can change anytime depending on the current trend in the market.

Borrowers who choose a fixed rate mortgage pay the same amount for their monthly payment or amortization. The fixed monthly payment is computed in such a way that at the end of the term, the mortgagor will be able to pay the value of the loan including the interest. There is an agreement between the borrower and the lender that the loan will be paid in full at then end of the term.

The Benefits Of Getting A Fixed Rate Mortgage

The fixed rate mortgage is the mostly preferred type of mortgage because it gives the borrower security over the abrupt increase of interest rate in the market. The fixed rate mortgage may be a bit higher (in terms of interest rate) compared to adjustable rate. This is due to the fact that interest rates can go high or low depending on the market trend. A large number of mortgagors choose the fixed rate mortgage to avoid getting into the interest rate risks.

The fixed rate mortgage is advisable to first time buyers and those who don�t want to take the risk. Having a fixed rate mortgage will save you from worrying every month about your interest rate. It allows you to live in comfort knowing your monthly amortization will not change. After all, it seems that interest rate continues to rise and seldom go down.

Fixed rate mortgage lets you gauge where you are financially. You will be able to budget your money and plan ahead with your finances. You are spared from all the worries.

Choosing The Type Of Mortgage

Although a fixed rate mortgage seems to be a very practical option, you should still consider your own needs when deciding what type of mortgage to take. It would be best to consult a mortgage broker in your area to ensure you get good advice. Deciding over a mortgage may be hard especially for first time buyers. The suggestion and advice you get from a mortgage broker will help you decide wisely.

It is important; however, that you get advice from good mortgage brokers. There are also those who claim to be experts in the mortgage industry but will not be able to help you decide at all. So make sure, you go to a qualified mortgage broker.

By: Irish Mortgage Brokers