Fixed Rate Mortgages Explained
Owning a home has become one of the sure ways to secure a stable future for you and your family. A home is not only an investment but also a place where you can build memories that last a lifetime. However, this dream is not without its share of uncertainties. Mortgage rates can be confusing leading to poor choices. In that case, it's important to understand what a fixed-rate mortgage is, how it works, and how you can get one.
What is a fixed Mortgage rate?
According to Investopedia, a fixed-rate mortgage is a loan in which the interest rate stays the same for the entire term of repayment. This means that you will pay the same amount each month for your mortgage and interest. Fixed-rate Mortgages are ideal for homeowners who want to keep their monthly payments stable and predictable.
How a fixed rate mortgage works
A fixed-rate mortgage works when you choose an interest that fits your budget and stick to it for the duration of your home loan. You and your lender will agree on a fixed interest rate, which can be lower than market rates. This means that you will pay the same amount each month for your mortgage and interest.
Regardless of whether the rates go up or down, you will be locked to the same interest for the duration of your loan. For example, if you find a rate that allows you to pay $1400/month for 30 years on your mortgage, your lender expects you to pay that amount every month until the last month of the 30 years.
Benefits and Limitations of Fixed Rate Mortgages
Fixed-rate mortgages are excellent for people who want to be able to budget for expenses. You know exactly how much money you will have to pay each month and when it will change. Most people also like the security of fixed-rate mortgages since you won’t have to worry about your mortgage payment fluctuating or going up unexpectedly over time.
On the flip side, fixed-rate mortgages are not ideal for people who want to lock in a low-interest rate and then sell the house before it has been paid off. If you plan to move within a few years, consider another mortgage option.
How to get a fixed rate mortgage
While financial institutions are known for offering a variety of mortgage types and rates, working with them directly has a variety of limitations. Choosing the right mortgage specialist, however, gives you the upper hand to land the best rate that fits your budget.
Let's break it down
If you need a low-rate mortgage with a fixed interest rate, getting the best home financing deal can be a lot of hard work. The mortgage market is big, and getting bigger every day. The more lenders you look at, the harder it is to compare the best rates.
Information overload can make it difficult to figure out the perfect financing options for buying your dream home. When comparing mortgage rates, you also need to consider many additional factors beyond the basic rates such as additional fees, amortization period, prepayment penalties, and mortgage lender options just to name a few.
Working with me & the BorrowWithBonnie team will allow us to shoulder the heavy lifting while taking the time to work with you in closely explaining the intricate details of the mortgage and lending process. All the while helping you to save time and money ensuring your receiving the best-suited financing options for you and your specific situation.
Looking for a fixed-rate mortgage? Contact Bonnie today.
- Negotiating with credit lenders
- Analyzing and comparing different loan options
- Help clients with all the paperwork regarding their mortgage
- Act as an intermediary by communicating with lenders and borrowers.
- Ensuring compliance with provincial and federal banking, finance and tax laws.
Mortgage specialists can help you with more than just finding the best deal. The above responsibilities are just the beginning of what they can do for you. A good mortgage specialist will go above and beyond to find the right loan program, develop a plan to save on interest and fees, guide you through the approval process and help you secure a competitive rate.
Working alongside mortgage specialist Bonnie you can expect superior customer service, some of the lowest mortgage rates in Kelowna, from one of Canada’s leading lenders.
The Key Responsibilities of a Mortgage Lender
Mortgage lenders are mainly financial institutions that provide loans to borrowers who want to purchase a home. Their key responsibilities include, and are not limited to:
- Providing mortgage advice, including selecting the right type of mortgage product and helping you understand all the facts and figures involved in financing your home.
- Offering mortgage products, including different types of loans with varying features and benefits.
- Processing your application for financing (underwriting), which includes verifying your income and employment status before providing a quote for how much money they will give you to purchase or refinance real estate property.
- Managing the entire process from start to finish
- Performing a credit check
Similarly, mortgage lenders have more responsibilities than what is mentioned here. However, this is a good starting point for understanding the role of a mortgage lender.
Why you should choose a specialist over a lender?
The decision to choose between a specialist and a lender depends entirely on you.
However, a specialist has a competitive advantage over working directly with the lender. specialists are in direct contact with borrowers and lenders. Being on the front lines, they have a better understanding of what type of loan is best for you. And it's not just about getting the lowest interest rate or down payment requirements.
Moreover, a specialist will give you more flexibility when it comes to the type of mortgage you get. A lender, on the other hand, will only offer you a specific loan product that they have access to through their institution. In addition, a specialist can work with many different types of lenders and can compare rates and terms before deciding which one is best for you.
Both mortgage specialists and lenders can help you land your dream home. However, choosing to work with a specialist is going to save you time and money as finding you the best deal is our number 1 priority.
My name is Bonnie, and I am a mortgage specialist. I take pride in helping my clients find the best options for their mortgage needs. If you are looking for a low-rate, no-hassle experience, contact me today!