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Why Now Is The Time To Get A Fixed Rate Mortgage.

Todays Date: December 17, 2018

Right now is a buyer’s market in Minnesota, and that’s good news if you’re a first time home-buyer. It means there are lots of homes to choose from, and because there are so many properties on the market, you have a good chance of purchasing a starter home or the home of your dreams at a very reasonable price. First time home-buyers also often qualify for special incentives and perks that can make buying a home even more attractive than renting.

Unless you can pay for your home in cash at the time of the sale, you will need to take out a mortgage on the home you are buying. You will usually need to pay up to 20 percent of the home’s purchase price at the time of the sale sometimes less if you qualify for some of those first time home-buyers incentives but then you will need to borrow the rest of the purchase price from a bank, savings and loan, or other lending institution.

A mortgage will probably be the largest loan you ever take out, and one of the most important. For example, if you purchase a $100,000 home and pay a 20% down payment, you will need a mortgage in the amount of around $80,000, which is a lot of money for almost anybody. While making your monthly payments, a fraction will pay the principal amount you owe, and another fraction will go towards interest. If you are paying the minimum amount each month, your payments will basically be paying the interest rate instead of reducing the principal amount.

That being said, you want to find a favorable loan that offers the lowest interest rate. This will ensure the cost of your home will be as low as possible, and it will also help make it so your monthly payments actually reduce your principal debt and will not just be going towards the interest. A fixed rate home mortgage is a wonderful option because it guarantees that the interest you are being charged will always be the same as long as you are paying off the mortgage. If you take out a 30-year mortgage to pay for your home with a 5% interest on the unpaid principal every year, it does not matter if interest rates rise to 10 or 15 percent. No matter what happens you are guaranteed that 5% mortgage rate.

Another type that is not as favorable is the adjustable mortgage. As the name implies, the rates adjust to the national average every year or two. So if national interest rates rise, your home mortgage interest rate will increase. If your interest rate increases, so will your monthly payment because it reflects the entire loan and the interest terms that came with it.

Right now, with interest rates lower than they have been in years, is an unbeatable opportunity to get a low, fixed rate home mortgage. Purchasing your new home now, with the prices, interest, and the market being where they are, presents an opportunity you just cant pass up. Not to mention the peace of mind you get knowing exactly what your interest rate and monthly payment will be for the entire term of your loan.

Ben Olson is certified by the Minnesota Mortgage Association as a Minnesota Mortgage Specialist, and has earned their national designation, Certified Residential Mortgage Specialist, which puts him in the top 1% of his colleagues nationwide. Come learn about fixed rate mortgages and the

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