Benefits of a Las Vegas Fixed Rate Mortgage Loan
A fixed-rate mortgage gives you an opportunity to lock in a specific interest rate. This percentage will apply throughout the entire term of your home loan. With a Las Vegas fixed rate mortgage, Las Vegas homeowners always have the same monthly house payment. Changes to your property taxes, homeowners’ insurance, or association dues could affect your monthly housing costs, but your actual mortgage payment will not change.
Stable Home Budget
A fixed-rate mortgage lets you know exactly what to budget for housing over the long term. For this reason, this form of mortgage remains the most common type of home loan. If you are planning to occupy a home for many years, this mortgage could present an ideal financing method.
When you get a fixed-rate home loan, the payment process steadily builds home equity. The amortization schedule for your loan will show you how much of each payment goes toward principal and interest. As the years go by, the payment typically shifts more of the money toward the principle as the accrual of interest declines until the entire loan is paid in full. The loan documentation will disclose the total amounts that you will pay in interest and principle over the term of the mortgage.
Predictable Interest Rate
You will make financial decisions concerning your home purchase based on the current interest rate. If interest rates go up in the coming years, they will have no influence on your house payment. Because buying a home represents a substantial monetary commitment, a fixed-rate loan could provide you with peace of mind.
Choice of Term Length
Lenders can issue Las Vegas fixed rate mortgages in terms of 10, 15, 20, 25, or 30 years. Fifteen and 30-year loans are the most common. Shorter loan terms mean that your monthly payments will be higher, but you will build home equity more quickly. Alternatively, longer loan terms produce smaller monthly payments.
This flexibility could create opportunities for meeting your financial goals. For example, the 30-year loan with the smaller payment could make room in your budget for other priorities. If you can afford a larger payment, however, a mortgage with a shorter term speeds up the process of owning a property debt free.
Other Fixed-Rate Loans
Although standard fixed-rate loans finance the bulk of residential purchases, some other options offer the predictable costs of a fixed rate. These are called non-amortizing fixed-rate loans, and they do not divide payments between principle and interest. One form adds the interest to the principle as it accrues. At a specified date, all sums must be paid in their entirety. An interest-only loan is another variation. Your payments will just cover interest. When the loan comes due, you will payoff the principle.
A professional at Drennen Home Loans can guide you through your financing decisions. To learn what the payment could be on a fixed-rate mortgage Las Vegas home, contact us today.