If you’re in the home buying market, you’ve probably been inundated with information about your mortgage options. At a certain point all of the finance terminology starts to sound like a foreign language.
Thankfully, you don’t need to be overwhelmed when it comes to understanding a fixed rate mortgage. One of the most straightforward loans, many home buyers opt for this option due to their security and transparency. Here are a few benefits to consider when deciding if a fixed rate loan is best for you and your family.
- Lock in Your Interest Rate
When you get a fixed rate loan from Abbeville First, the interest rate (the percentage you pay your lender in exchange for the loan) that you qualify for at the time of closing remains the same throughout the life of the loan. This means that even if interest rates increase, your mortgage payment stays the same every month.
For families or individuals on a budget, this is a huge benefit of having a fixed rate loan. When you know exactly what you’re paying each month, budgeting and building a savings becomes easier.
- Transparent Loan Terms
Many buyers opt for fixed rate loans due to their easy-to-understand terms and conditions. When shopping for a mortgage, a lot of the terms you’ll hear may sound overwhelming if you’re not familiar with the industry.
Fixed rate loans are upfront with their terms and repayment schedule, and often come with an amortization schedule at closing. This schedule outlines each month’s payment, how much will be allocated towards principal (the original amount that you borrow) and interest, and exactly how much longer it will take to pay off the loan.
- Pay Towards Principal
Since Abbeville First Bank doesn’t have any prepayment penalties, you have the option of paying extra money towards your principal each month. Even an amount as small as an extra $10.00 per month can help you make huge strides towards taking months, or even years, off your mortgage.
Ready to take the next step? Get pre-qualified for a Fixed Rate Mortgage today!