In Utah and elsewhere in the country, fixed-rate mortgages are the most popular financing solution. But, that doesn’t mean this type of home loan is your best option – to make that decision, you need to consider a number of factors, including your personal financial situation and the ever-changing mortgage marketplace.
If you’re making plans to buy a home in Orem, the mortgage professionals at Intercap Lending can help you find a financing program that works for you. Here, we review the pros and cons of choosing a fixed interest rate home loan.
Merits of Fixed-Rate Mortgages
Fixed interest rate home loans aren’t popular for no reason at all – would-be Utah homeowners turn to this form of financing because:
- The interest rate never goes up
- The monthly payment doesn’t change
- Mortgage term options are flexible
As to that last point, lenders offer term lengths of 10, 15, 20, 25 and 30 years, allowing borrowers to select the option that fits their financial situation. For anyone who wants peace of mind and those who have a low appetite for risk, a never-changing mortgage payment is rather appealing.
Drawbacks of Fixed-Rate Mortgages
Fixed interest rate home loans aren’t always the best choice. Some people in Orem, Utah, decide against this type of mortgage because:
- The interest rate is typically higher than that with an adjustable-rate mortgage
- The fixed interest rate results in a higher monthly payment
- Refinancing is the only way to benefit if interest rates go down
In regards to mortgage refinancing, some northern Utah homeowners are dismayed to learn that changes in their financial profiles – such as a drop in credit score or a job loss – can make them ineligible for a refinance loan. In that situation, there’s no way to avoid paying the higher interest rate.
Talk to a Mortgage Professional Today
Is a fixed interest rate mortgage right for you? For expert advice on home financing solutions, people in Orem and the surrounding northern Utah area turn to the professional team at Intercap Lending.
A trusted Utah mortgage lender, Intercap Lending has been guiding people through the home loan process for decades. We’re ready to answer your questions about home financing, and we’d be happy to help you explore all of your mortgage options. Call on us when you’re ready to buy a home, and we’ll match you with a mortgage program that makes the most sense.
For more details on the services we provide, or to speak with an experienced professional about the pros and cons of taking out a fixed-rate mortgage, contact Intercap Lending in Orem, Utah, today.