Lower interest rates for the first three to seven years into a variable rate mortgage seem attractive at first glance. But the reason you may hear they should be avoided is that down the road, the interest rate changes with the market. The few thousand saved could be offset by potentially high interest rates, making a fixed rate mortgage loan a better option for many first time buyers.

But there are also advantages to the adjustable rate loan – read about those here…

So then, why consider a fixed rate loan? Here are our top three reasons:

1. Predictable Monthly Mortgage Payments

Fixed rate loans eliminate worries about potentially high increases in interest rates that could mean paying more per month down the road than was saved in the beginning. Unless their income keeps pace with or surpasses the costs of living, an increase of hundreds of dollars a month could be a burden for buyers who need a more predictable payment. The interest rates for fixed mortgages may be slightly higher than other mortgage loan products’ initial rates, but the total amount it costs to borrow the money is not subject to change.

2. Affordable Convenience

Lower payments make getting started owning a home more manageable than having to forecast savings to cover possible payment increases with fixed rate mortgages. Planning a financial future is more efficient when you know ahead what an expense will be instead of having to gauge it like playing whack-a-mole. What you put into savings continues working for you instead of going toward higher monthly mortgage payments.

3. No Prepayment Penalty for Paying Off the Loan Early

Low or stagnant wages with no raise in sight make a stable monthly housing expense more manageable. During more prosperous times, consumers save money by increasing the amount paid toward the principal balance or even paying off the loan years ahead of its maturity. Unlike other nations that require prepayment fees on such loans, homeowners in the United States can choose to prepay without penalty.

A fixed rate mortgage loan is a financial tool offering peace of mind knowing the precise monthly expense for housing for a first time home buyer, in Ventura County or anywhere in California. Purchasing a home with a fixed rate mortgage makes sense for consumers who want to avoid wildly fluctuating interest rates and inevitable annual increases in rental leases. Buying a home in Ventura County with a fixed rate mortgage helps make the dream of home ownership come true.