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Fixed-rate mortgages are often characterized as one of the most predictable types of mortgages. They are fairly straightforward. Your fixed-rate mortgage will always have the same interest rate no matter what the financial landscape looks like in your region or in the nation overall. The advantage is that it is much easier to plan your financial future with a loan that offers stability and predictability. You know exactly how much you will need to spend every month for your mortgage payment so the guesswork is gone!

Longer loan terms may lead you to pay more overall and your interest rate may be higher, but the tradeoff is that you will have lower monthly payments. Shorter mortgage terms allow you to pay off your home faster and build that all-important equity but your monthly payments will be higher.

So why should you choose a fixed rate mortgage? You would probably be a good candidate if you intend to stay in your home for many years; you may even intend to pay it off entirely without selling. People who prefer the stability of a predictable payment pattern are also well-suited to this type of loan. Buyers also need to evaluate the economic climate; if they think this is a "good" interest rate compared to the norm, they should probably consider a fixed-rate mortgage. You could be enjoying smaller payments while people with other loans are struggling to understand and accommodate their variable rates!

The most common term for a fixed-rate mortgage is the 30-year option, though this type of mortgage can take as little as 15 years to pay off. It is important to keep in mind the fact that the total amount of interest you pay is more dependent upon the length of the mortgage rather than the interest rate itself -- an extra 10 years of payments can add up to tens of thousands of dollars!

Fixed-rate mortgages are ultimately best for those people who intend to stay in their home for a long time and who believe that interest rates will remain stable for the near future. No matter your credit history, a fixed-rate mortgage should be on your list of considerations when you begin to research your own home purchase.

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