30 Year Fixed Mortgage Rates, The Best Refinance Option For Your New Loan!

30 year fixed mortgage rates are the safest options you have available to you. If you are planning to refinance your construction loan into long term financing, 30 year fixed mortgage rates are your best bet in a good or bad economy. Most however preferred the sexy adjustable rate mortgages or interest only mortgages, which led to many foreclosures.

The allure of very low mortgage payments for the first few years proved too enticing. People bought under the impression that housing prices never declined. They thought that at some point in the near future, we will just refinance into a long term fixed mortgage.

I don't fault people, but their lack of knowledge of their mortgage rates, and greedy bankers led to the financial meltdown around the world.

Many prefer the 30 year fixed mortgage rates option because it gives them longer to pay off their loans, reducing their monthly payments. This especially is an excellent option for new homeowners who have just completed their home building project with a construction to permanent loan, as it is much easier to get it approved.

Another advantage of applying for a 30 year fixed mortgage rate is that the interest rates remain the same for the entire 30 years. In other words it is not susceptible to changing markets rates. Also, a lot can happen over a 30 year span. Your salary could increase and this would leave you with more disposable income!

Most new homeowners find this an excellent option because it gives them the basic framework of how much they are to pay every month as their monthly mortgage payment. Since the monthly payment is stable, they don't worry about the prevalent market lending rates.

Let's look at the advantages of 30 year fixed mortgage rates!

  1. The monthly payments are predictable, since your payments are not a reflection to the market index it is considered to be a hedge against inflation.

  2. Since there is no rate fluctuation, it is easy, and maintenance free.

  3. Points (X percent of the loan balance in upfront fees) paid on a refinance are tax deductable (because points are considered interest). Points are deductable only on the first 1.1 million financed. For example, if you paid $6,000 in points, you would deduct $200 annually over the 30 year loan. If you sell the home you can take the remaining deduction in that year.

  4. The interest paid in your monthly payments are deductable.

  5. If you see the market rates drop, and it seems to be affordable you can apply for a refinance option.

However, before you apply for the loan, make sure you have all your expenses including debt payments listed. This should give you an idea of how much you can afford to pay.

How much down payment should you pay to lower your monthly payments?

The higher the down payment the lower your monthly payment will be. The interest on your loan will also reduce. This is because most lenders calculate the interest rates on the outstanding balance of the loan.

If you only have a construction loan and are looking for permanent financing to lower your monthly payments, you can also, opt for a refinance to 30 year fixed mortgage rates. This will allow you to pay off your existing high interest rate construction loan balance and reduce your interest rates with a conventional mortgage!

Don't make the mistake of only being concerned with rates and fees. You have to remove yourself from the equation and look at the big picture.

Think of your family needs and not your wants, with questions like:

  1. Do you have enough liquidity, should bad situations happen?

  2. Are you making the right choices for you tax bracket (meet with your accountant)?

  3. Are your other investments properly diversified?

  4. Does this mortgage fit with your retirement strategy?

If you haven't thought about these questions, please do not pass Go or collect $200 dollars. In fact, go straight to jail until your next turn (this will give you some time to figure things out)!

It is best to check with your loan officer about the amount of your refinance so you don't request more than required for your situation. With a refinance option for your newly constructed home you will be saving thousands in interest.

With good home equity you can borrow a little more than what your current balance and help pay off your debts! Acquiring 30 year fixed mortgage rates is the safest investment you can make in your families future.

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