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The Dynamic of Home Mortgage Interest Rates

Home Mortgage interest rates are based on a wide variety of variables. For example, are you interested in exploring and potentially contracting into a fixed or otherwise prefer an adjustable rate? In such instances, you are able to achieve a lower interest rate over-time, as you continuously pay off your monthly to annual mortgage rate interests, fees, and taxes - and of course insurance payments - in a timely manner. That is, as banks and lenders in general make it an effort to 'reward' such consumers as the statistical probability increases that they will pay the entire mortgage off the closer they get to 'reaching the finish line' or paying it off completely. In fact, a similar dynamic and repayment plan is often seen with automobile loans as well.

Many consumers desire such a 'vanilla product' known as fixed-rate mortgage interest rate plans because they are able to consistently anticipate the monthly payments over a period of 10 to 20 years or more - in many instances 30-50 years.

At the same time however, obtaining a fixed-rate home mortgage also puts consumers at a disadvantage because if they're locked into a high rate, that is the rate they're indefinitely left to pay; which in essence means in the beginning of the home mortgage process they were limited to a certain price range median - for example, due to an unusually high or increased interest rate due to low credit or not a high enough or desirable salary + net worth or income.

Variable Rate Home Mortgages on the other hand are just that - they vary in the nature of amount and requirements or demands on a monthly to annual basis. Unfortunately, such a situation can be either beneficial or detrimental to a borrower - dependent upon the circumstances.


Although a more popular choice, as they're easier to obtain for most borrowers due to their lower monthly payment or annual contract, they can also be very dangerous and costly to borrowers as they have been observed to increase as much as 100% in monthly payments in the past due to fluctuations in the market and changes in the interest-rate system or criterion. Worst, such variable rate home mortgages are also much more commonly known to subject borrowers to hefty late-fees, and especially any attempts to remortgage or otherwise alter their payment plan, structure, and agreement due to unruly or unaffordable changes in the mortgage agreement and interest rates.

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