30 Fixed Mortgage Rates – Common Mistakes People Make

30-year fixed mortgage rates are perhaps the most common mortgage loan plans on the market. On the whole, fixed rates are more affordable and predictable than adjustable rates. Further, the 30-year option maintains a reasonable monthly payment for such a large loan. Just because these mortgages are popular, though, does not mean they do not come with potential hazards of their own. Common mistakes with these loans include:

  • Not placing a large enough down payment - 30-year loans are so slow to pay off that it can take years to build equity in the property. Without a large down payment, a borrower can suffer from too little equity for a large amount of the loan.
  • Failing to use buy downs - Borrowers should look for ways to make even a fixed mortgage more adaptable. A buy down can provide a borrower the benefit of low initial payments without the risk of adjustable rates.
  • Jumping at fixed-rate options - If a borrower plans on being in a home for a very short period of time, a 30-year fixed loan may not be the best option. Considering adjustable rate loans in some situations will save the borrower money over jumping at the fixed loan options.
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