This is your standard 25 year, fixed interest rate mortgage loan. With the record low interest rate environment, many borrowers are looking toward these types of programs in hopes of locking in a consistent payment mortgage with an accelerated payment schedule that allows them to pay their home off in 25 years. The interest rate on a 25 year mortgage may be much lower than that of a 30 year term loan and you may save tens of thousands on interest over the life of the loan. There are some things to consider however before committing to the fixed rate loan.
For example, most borrowers refinance every 3-5 years or so for one reason or another.
- Interest rates may be lower than they were when they got their loan.
- Perhaps we may have kids going to college.
- Desire for home improvements.
- Need money for real estate, starting a business, or other investment.
- Decide to sell your home at some point to down size or even upgrade.
Let’s face it, a lot can happen in 25 years and all of these are real world examples that would cause someone to refinance before the home is paid off 25 years down the road. If you think you might need to prepare for one of these scenarios, then perhaps there are other options for your home loan needs.
The 3/1 or 5/1 hybrid Adjustable Rate Mortgages (ARM) for example offer you a fixed interest rate for a period of either 3 years or 5 years respectively. Because the interest rate is only fixed for a proportion of the loan term, you may get to enjoy a low interest rate and a lower monthly payment than you could with a 25 year fixed. Once the fixed period is over you may have the opportunity to either refinance, make payments based on the then adjustable/fluctuating rate, or sell the home. You may also want to consider the 30 year fixed rate mortgage due to the low monthly payment.
However, many folks enjoy the peace of mind offered by a 25 year fixed.
It is an attractive thought to own your home free and clear after just 25 years, instead of 30 or more.
- The 25 year fixed is a very safe and secure loan with an accelerated payment plan that may get you some of the lowest interest rates available on the market, at a fixed rate too!
Get a free and accurate loan comparison and see which program makes the most sense for you, and your family today.
FINANCIAL DISCLOSURES: MakeWay Mortgage Inc. is a mortgage broker who is not an agency of the federal government, nor affiliated with your current lender. This is not a commitment to make a loan. All approvals are subject to underwriting guidelines and eligibility. Underwriting guidelines include but are not limited to: debt to income ratio, loan to value ratio, acceptable credit and or income history, property type, current homeowner’s insurance, equity position, property type, number of units, financial reserves, bank statements, financial statements or tax returns, insurance, occupancy type, number of financed properties, Debt Service Coverage Ratio, rent history, taxes, etc. Call to secure your pricing today!