The financial balance of recent years has shown a significant increase in the application for mortgages to acquire homes, cars or some other good. This fact demonstrates that mortgages are a valid option, as long as at least three requirements are taken into account to succeed in fixed rate loans.
What is a fixed rate mortgage?
There are two types of mortgages: variable mortgages and fixed mortgages . Variable type mortgages are loans whose interest rates fluctuate in relation to the conditions determined by the market. Thus, there is a risk that rates will rise disproportionately in a context of economic crisis, or that they will decrease or be maintained, always at the mercy of the state of local, national and global finance. Although it is a blind bet, variable rate mortgages offer greater advantages and facilities due to their high risk. Fixed-rate mortgages, on the other hand, maintain equal interest rates for all the years agreed for the payment of the credit. Since the risk is lower , the rates are usually higher. Choosing between a fixed or variable rate mortgage should always be a decision made with full awareness of the ability to pay and a thorough study of the current and future market.
Fixed rate mortgages; a safe bet to buy housing
Fixed-rate mortgages are a valuable and effective tool to own a home. It is the safest option to properly plan and develop a payment plan that can be carried out successfully. So reliable is this option that the high rental costs have made many families think about taking the mortgage loan option to become homeowners . There is no doubt: between paying a mortgage or living on rent, the mortgage is always a better option.
Three requirements to consider in fixed rate mortgages
To apply for a fixed rate mortgage and not fail in the attempt it is necessary to take into account three essential requirements that can be very valuable because, if they are not taken seriously, they can turn the mortgage into an unbearable nightmare.
- The first requirement is to be aware of the percentage of interest offered by banking institutions. Usually long-term mortgages (30 years) are assigned a rate of no more than 3%. Short-term mortgages (10 or 20 years), the percentages found are around 2%. It is possible to find higher and lower interest rates at those ranges; However, the decision must always be based on the benefits , ability to pay, levels of risk that can be borne and deadlines.
- The second requirement is to take care of commissions . Fixed-rate mortgages cover their risks with commissions that can be around 1% and may make your payment program more expensive and unfeasible.
- The third and final requirement is to avoid or decrease the number of links . Bindings are not mandatory and end up being an additional hindrance in finances. With these three insurance requirements you will increase your chances of having a mortgage with a happy ending. New Mortgage Law; the best fixed rate mortgages
The new Mortgage Law brings some advantages and greater controls that allow for greater growth and opportunities for both the public and financial institutions. Thus, finding the best fixed-rate mortgages is an increasingly easy task, as long as you are careful to consult experts and approach financial institutions of recognized prestige.