Should i agree for a 20 year mortgage at a fixed interest rate? - fixed interest rate comparison
I agree that 20 years should be at a fixed rate mortgage or an interest rate fluctuates and is on the performance of the economy on the basis of acceptance. I know the pros and cons of the two who have no access to historical trends, has to make an intelligent decision. Then the finance or loan officers is to help you?
Tuesday, January 19, 2010
Fixed Interest Rate Comparison Should I Agree For A 20 Year Mortgage At A Fixed Interest Rate?
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Fixed, fixed. Fixed go all the way! Unless a lower rate in the future to refinance.
ReplyDeleteARM or variable adjustment of interest rates forever. I do not have all of them could hear downward adjustment (but happen when Hell Freezes Over). The lender has no way of knowing what the future brings. Ask them. They will tell you who does not. But lenders are waiting to know what the future holds for you if you will in the future, the monthly payments to increase almost certain to happen.
ReplyDeleteThere is always a warning that says: "Past uses of future performance."
I would be set to 30-year. Here's why:
$ 150,000 @ 6% for 30 years = pay $ 900 payments over 30 years.
$ 150,000 @ 6% for 20 years = $ 1075 payments. Open for 20 years.
$ 150,000 @ 6% for 30 years with an additional $ 175/mo = payable in 20 years. The advantage here is that you have paid the mortgage in 20 years anyway, but they are locked in an increase of $ 1075 monthly payment if you are a small financial emergency (car repair, medicine have, etc.) or an increase in comparison with constant through taxes orSt insurance premiums you pay $ 70 more in interest over the term of the loan compared to the line set at 20 years, higher monthly payment.
Usually mortgage loans are adjustable Price is based on the first or the last 12-month LIBOR. In general, the premium to 12 months Libor rate by 2.25%. If the current LIBOR rate to a peak of over 1.25 could be the interest rate on an arm of a very good 3.50%. However, if past is any indication, 12 butterfly Libor reached 5% or more, at least every 5 years, so that your mortgage interest rate to 7.25% or even higher.
ReplyDeleteThe question you should ask is whether you take the risk. Also, if you take the risk, you have emergency funds aside in the hope of waiting for the high interest rates? Try to refinance you if Libor is high does not help, because the fixed rates are high.
What follows is the story of a 12-month LIBOR over the last 20 years. The 10 years before most affected over 15%.
http://www.wsjprimerate.us/libor/libor_r ...
Usually mortgage loans are adjustable Price is based on the first or the last 12-month LIBOR. In general, the premium to 12 months Libor rate by 2.25%. If the current LIBOR rate to a peak of over 1.25 could be the interest rate on an arm of a very good 3.50%. However, if past is any indication, 12 butterfly Libor reached 5% or more, at least every 5 years, so that your mortgage interest rate to 7.25% or even higher.
ReplyDeleteThe question you should ask is whether you take the risk. Also, if you take the risk, you have emergency funds aside in the hope of waiting for the high interest rates? Try to refinance you if Libor is high does not help, because the fixed rates are high.
What follows is the story of a 12-month LIBOR over the last 20 years. The 10 years before most affected over 15%.
http://www.wsjprimerate.us/libor/libor_r ...