Advantages and Disadvantages of a Cash Back Mortgage
When you're buying a mortgage, you've a lot of options. One option is really a five-year fixed-rate mortgage. With this kind of mortgage, your interest rate will stay exactly the same for five years. That may give you some satisfaction, knowing that the payment isn't going to increase. But there are several pros and cons to consider before you commit to a five-year fixed-rate mortgage.
In this article, we'll discuss the professionals and cons of the best 5 year fixed rate mortgage. It will also help you choose if this kind of mortgage is right for you. Pros to look at: ● Your payments are predictable for the following five years. This can help with budgeting and planning for the future. ● A fixed-rate mortgage protects you from rising interest rates. If rates increase after you obtain your mortgage, you're locked in at the lower rate. ● It might be more straightforward to qualify for a five-year fixed-rate mortgage than other kinds of mortgages, such as an adjustable-rate mortgage. Cons that you should look at: ● You might pay a greater interest rate with a five-year fixed-rate mortgage than you would with other forms of mortgages. ● Your monthly payments might be higher than they'd be with other kinds of mortgages. ● In the event that you sell your home or refinance ahead of the five years are up, you could have to pay the penalty.
Conclusion: Weighing the professionals and cons of a five-year fixed-rate mortgage can help you decide if it's a good choice for you. If you'd like predictable payments and protection from rising interest rates, a five-year fixed-rate mortgage may be a good option.
Just remember that you could pay an increased interest rate, and your monthly payments could be on the high side. It's also wise to factor in virtually any penalties you may have to pay for in the event that you sell your property or refinance prior to the five years is up.