Monday, October 02, 2006

Fixed Rate Mortgage

Simply put, its where interest rate is locked in for life of the mortgage, either 15 years or 30 years. You don't have to guess what's your next month payment is going to be and you can easily budget yourself. Plus, you can add more to the principal to pay off your mortgage sooner. Just make sure it goes toward principal and not for advancing next month payment.

Good thing about having a fix rate mortgage is that if you bought a home when interest rates are low, you are lock into that rate for life of the loan. Bad thing is that if interest rate do fall, you can't change your interest rate unless you refinance, which will cost you more money.