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 ❑ What is a Fixed Rate Mortgage?
 ❑ Benefits of Fixed Rate Mortgage
 ❑ Fixed Rate Mortgage Terms
 ❑ Consult with the Professionals
It’s easy for a first time home buyer to get lost when swimming in the sea of mortgages. The most common question of first time home buyers are “what mortgage is right for me?". We always recommend 30-Year fixed rate mortgages for first-time home buyers, and fixed rate mortgages are the most popular mortgage choice amongst home buyers known to date because they are the easiest available mortgage loans to understand for the first-time home buyers.

Fixed rate mortgages allow for borrowers to pay their mortgage repayments on a set monthly amount that will not be subject to change over the course of the mortgage repayment process. For example, if you purchase a home today under the term of a 30 year fixed rate mortgage and your current monthly mortgage repayment is $1,400 per month, twenty five years from now your monthly mortgage repayment will be the same amount. In other words, since a fixed rate mortgage maintains fixed payments throughout the entire loan term, it helps long-term homeowners in planning their budgets and insulates them form ever increasing interest rates.

A fixed rate mortgage has distinctive features such as a permanent rate for long term, consistent monthly repayments and lower risk. The interest rates are calculated when you apply for your loan. These rates are decided by the market. These can also be lowered by paying points up front.
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A benefit of fixed rate interest loans is the long-term low monthly payment and inflation hedge. As the cost of living rises the mortgage payment will remain the same. Your salary will also hopefully increase long term, thereby reducing any stress for meeting the mortgage payment and allowing you to save money.

Another attractive feature is the low risk of fixed interest rates. You will not have to worry about rising interest rates. A fixed rate loan can be repaid early, thereby helping you to save money on interest payments.

Fixed rate mortgage loans provide peace of mind for their holders.
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"Mortgage (Loan) Term" means the period used to calculate the monthly mortgage payment. The term is usually but not always the same as the maturity. Most fixed rate mortgage loans are conventionally issued for a term of 15 to 30 years, and the most popular ones among first-time home buyers are with a term of 30 years due to their low monthly payments.

Shorter term may potentially lower interest rates, but it means that the monthly payments will be higher. On the other hand, longer term offers a lower monthly payment but may come with a higher interest rates.

For regular fixed rate conventional loans, you can always make extra payments towards principal to acclerate your pay off date and save on interest.
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Every loans come with their share of advantages and disadvantages. You might have to refinance to get all the benefits, which would mean that you'll have to spend a good amount of money in closing costs and will have to again pay a number of visits to the finance companies office to once again submit a whole bunch of documents. Fixed rate mortgage loans can also prove to be extremely expensive for some borrowers, especially for those operating in high interest rate environments.

Consider all these facts, determine your options and select the loan which is most appropriate to your condition and circumstance. Consulting with mortgage professionals with knowledge and experience is essential to choosing the right mortgage loan for you.

If you're looking for a home in the State of Georgia, our mortgage department will be a great help to you. Asking advice of experienced mortgage professionals is your first step to sucessfully be approved for your first-home mortgage!
Magnolia Financial Services, Inc.
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