Just a few years ago, getting into an ARM loan was easier than a fixed rate loan, and many homeowners got into one. Now though, things have changed, and mortgage lenders and banks prefer to offer fixed rate mortgages to homeowners. Getting into any mortgage is a serious, long term, commitment, and needs to be carefully researched prior to agreeing to anything. Here is some help with what a fixed rate mortgage is, and how it can be used when refinancing.

Typically, when a homeowner refinances into a fixed rate mortgage, they will have the option of getting a 15 or 30 year loan term. Since the mortgage is for a high amount, and over the period of a long time, little things can dramatically effect the actual cost of your home. Fixed rate mortgages offer more stability than an ARM loan can. Also, for the most part, fixed rate loans are cheaper in the long term than an ARM is. While there are some benefits to an ARM loan, most homeowners will see the most benefit from a stable, long term, fixed rate mortgage refinancing.

While an ARM loan can make your monthly payment change at a moments notice, a fixed rate offers home loan payments that never change for the life of the loan. With the housing market, and overall economy going through problems, many banks and lenders are much more likely to offer, and approve, homeowners for a fixed rate mortgage. While the profits from these loans are lower than ARM loans, they are more secure investments, and also offer homeowners a chance to save their home long term, and in the short term.

Many homeowners will benefit from getting a fixed rate mortgage when they refinance. If you already have a fixed interest rate, you can refinance that rate into a lower interest rate. This will enable you to save a lot of money on your home loan every month, and tens of thousands over the home loans lifetime.

-M Petrone

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