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Types of fixed rate mortgage loans

Fixed rate mortgage loans have advantages and disadvantages. 30 year fixed rate mortgage loans, 20 year fixed rate mortgage loans and 15 year fixed rate mortgage loans are common. With a 30 year fixed rate, one can keep the monthly payments low as the mortgage is extended up to 30 years. The tax deduction also will be substantial. If one has a plan of staying in the house for a long time and also need extra cash monthly, this 30 year fixed rate mortgage loan is the best option.

With a 20 year fixed rate mortgage loan option, one can clear all debts in a lesser period compared to 30 years and also the interest rate is likely to be lower. With 20 year fixed rate mortgage loans, the monthly payments will be higher and one should be capable of making these payments. With 15 year fixed rate mortgage loan option, the amortization will be faster and hence one can build equity faster on the home. These types of mortgage loans are suitable for people who have big expenses coming down the years and also for those who have only about 15 years before retirement. The monthly repayment will be higher with 15 year fixed rate mortgage loans.

Whatever fixed rate mortgage loans you choose, make yourself clear about the repayment terms and amount. Depending on the monthly repayment amount, one has to carefully plan the monthly expenses to honor the commitments.