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February 26, 2013Today because of the fluctuating financial conditions neither the banks nor the real estate all over the world are certain about the mortgage deals. So from the mortgage rate news you can see many mortgage lenders are offering a fixed long term mortgage loans rather than short term mortgages at adjustable interest rates. Home buyers also have started to opt for the fixed mortgages like 20 year mortgage rates rather than obtaining a loan with variable ARM system. So it is believed as a wise to get enrolled with the 20 year fixed mortgage rates nowadays.
How to apply for 20 year fixed mortgage rates
In order to apply and get approval for the 20 year fixed mortgage rates you should submit a proof of stable income and good credit history.
How your credit scores matters here?
Just like the rest of the normal loans & lines of credit obtaining a home mortgage also requires a solid credit history. It serves as a proof that the homebuyer has posses an ability to repay the mortgage loan. When your report shows a high credit score it signals the lender that you were managed to repay your credits in your past and you are likely to get qualified for any type of loan you are applying for.
High credit score means lesser interest rate on your mortgage. Applicants who are appearing for a mortgage loan with high credit scores tend to obtain a mortgage loan with better mortgage interest rates.
So before you approach any lender for a mortgage with 20 year mortgage rates or any fixed mortgage loans it is good too review your credit report by yourself and take necessary steps if it requires an improvement. Apart from qualifying for the mortgage you can get the mortgage loan with the low interest rates. Often listen to the mortgage rate news so that you can know, what is the good credit score now for obtaining a mortgage without any hassle
Given below are some advantages and disadvantages of 20 year mortgage rates
Advantages of 20 year fixed mortgage rates
- Mostly the first time home buyer prefers to get this deal due to the low monthly mortgage payments.
- Low monthly payment means more cash left in hand every month. You can use it for spending and saving.
- Since you have locked with the best possible interest rate even if the interest rates keep on changing due to the financial fluctuation, you will stay on the safe zone.
- It is a very good alternative when compare it with the adjustable rate mortgage.
- When you decide to refinance your mortgage surely you can get a best deal on it.
- Normally buying a home through 20 year fixed mortgage rates will be very beneficial for the people who want to buy a home to begin a new life.
- In this fluctuating economical condition this long 20 year fixed rate mortgage is a safe and wise investment.
Disadvantages
Due to the fact that you have chosen a very long time you need to pay bit higher interest rates on your mortgage when compare to the people who have obtained the loan with the short term mortgage programs.
Even when the mortgage interest rate gets lowered in the near future still you will be paying the same fixed rate interest.
Every month you need to make your monthly payments toward the interest rate rather than the mortgage.
Since you are paying in the long tenure home equity rate will grow very slowly.
