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Nothing can be
quite as intimidating as signing on to pay for a loan
you’ll be tied down to for 15-30
years. You’re about to make a long-term
commitment and you need to know the
truth from fiction.
Some consumers mistakenly believe
that a fixed rate mortgage is always
better than an adjustable rate mortgage. Your
payment will never change, so how could
you go wrong?
Easily! What if the
economy wasn’t quite as good as it is now and
you’re paying
a much higher
interest rate than you could be? Or what if you plan
on moving within five years? An adjustable
rate mortgage may be just what you
need because it can offer you a
lower interest rate.
That extra interest
savings could be used as a down payment in your next
home – or for any number of
purposes such as funding a big family
vacation or paying for your son or
daughter’s college tuition.
Another common fallacy is
that if you have the money, you should funnel
it into
paying off your
mortgage as early as possible. This isn’t always true! Sure it
will save you money on your mortgage,
but what if you’re close to retirement
and don’t have any funds saved up
for the occasion?
It might be better to make
regular monthly mortgage payments and use the extra
money to build up in a savings for
the day
when you retire.
There are other ways that extra money can work for you
rather than a one-time mortgage payoff. Use
it to pay off other debt that
has a higher interest rate, such as
a credit card.
Many consumers like having a
mortgage because lenders see it as “good debt.”
Not always the case, say many financial
institutions. If you don’t make
enough to
make consistent payments,
it will ruin your credit rating. You want to make sure
your mortgage will have more positives than
negatives before you sign up for one.
Don’t be afraid to shop around for
the best deal!
© 2004 - All Rights Reserved. Apex Personal Loans
Store does not assume any responsibility for the
accuracy or completeness of the above article. Please
consult a financial advisor for specific advice
pertaining to your particular situation.
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