When shopping for a condo for sale in downtown San Diego, fixed-rate mortgages are often one of the best options. This type of mortgage has a fixed interest rate throughout the entire period of the loan, so it’s a little different from variable and adjustable mortgages. Though qualifying for a fixed-rate mortgage can be a little more challenging, you may want to go for this sort of mortgage if it’s available to you. Picking a fixed-rate mortgage means you get access to the following benefits.
You’ll Always Know What You’ll Pay
There’s absolutely no uncertainty with a fixed-rate mortgage. Since you can tell what your entire monthly mortgage payment will be years from now, it’s much easier to budget for things. Instead of dealing with financial uncertainty in your future, you can make informed decisions. You don’t have to worry about the potential of your mortgage payments soaring so high that you cannot meet them.
High Interest Rates Don’t Affect You
The biggest draw of a fixed-rate mortgage is that it won’t spike if interest rates go up. If you lock in a mortgage interest rate when it’s fairly low, you won’t have to pay high mortgage rates at any point during your loan. You could end up paying thousands of dollars less than people who purchased a comparable home with an adjustable-rate mortgage. Since inflation tends to make housing prices go up, your monthly payment may end up being relatively small in the later years.
You Can Easily Shop Around
Shopping around and comparing different mortgage offers is an essential part of the home-buying process, but it gets confusing when banks are offering complicated mortgages with all sorts of varying or adjustable rates. With a fixed-rate mortgage, what you see is what you get. You end up with one clearly defined number you can compare to other offers to find the most affordable mortgage.
Prepayment Penalties Are Lower
In contrast to adjustable-rate mortgages, the average fixed-rate mortgage doesn’t have high prepayment penalties, which allows you to pay more than the minimum required payment if you have a little extra money lying around. You can finish paying off your mortgage sooner, which saves you money and lets you build equity faster.
The Tax Perks Are Better
Homeowners are allowed to deduct some of the cost of their mortgage interest from their annual taxes. Due to the way they’re structured, fixed-rate mortgage payments go primarily to interest for the first few years, with only a small portion of the payment going toward the principal of the loan, which lets you save big on your taxes in the early years when you’re more likely to need a little financial help.
If you’re buying a home, one of the smartest choices you can make is going with a fixed-rate mortgage. Another intelligent choice is to work with real estate agents with years of industry experience and comprehensive knowledge of downtown San Diego real estate. The professionals at 92101 Urban Living can help you find the condo, loft, or penthouse that’s perfect for you. Give us a call today at 619-649-0368.