One of the most important decisions you will make in your financial life is which mortgage you should get. For many people, the option of a fixed rate mortgage seems appealing. But what exactly is a fixed rate mortgage, and why do so many people choose this option? If you are new to mortgages then this article will let you know a little more about fixed rate mortgages and their benefits.
What does fixed rate mean?
A fixed rate mortgage is fairly straightforward, and does exactly as the name suggests. A fixed rate mortgage has an interest rate that remains the same throughout the mortgage term, meaning that your monthly repayments will remain the same, allowing for inflation of course.
Why a fixed rate mortgage?
Many people choose fixed rate mortgages because of the security and peace of mind that they provide. If you have a fixed rate mortgage, then you know your monthly repayments will not change, meaning you can budget effectively for both the short and long term. If you have a mortgage with a variable rate of interest then your payments can change depending on market fluctuations. This can leave you paying less, but often leaves you paying more each month. The best times to get fixed rate mortgages are when competition is high, and the fixed interest rate is lower than that of the tracker or variable rate mortgages.
Are there any drawbacks?
There are drawbacks to getting a fixed rate mortgage. The biggest drawback is that the interest rate is usually higher than that of variable rate mortgages. The added security comes at a price, in that you have to pay more in interest over the length of the mortgage. Also, the ‘fixed’ rate is usually only fixed for a certain number of years, usually 2 or 3, after which the rate can be put up and then fixed for another period. This can mean that your mortgage will be cheap now, but in the future the rate could rise.
Who should get fixed rate?
Despite its drawbacks, there are many people that should definitely opt for fixed rate mortgages. If you are on a tight budget and have a fixed income each month, then you cannot afford for your payments to rise. Having a fixed repayment each month means that you know you can make the payment even if national interest rates rise. Also, if you can get a deal whereby the starting interest rate is lower than that of a variable rate mortgage or even the same, then opt for the fixed rate mortgage.
How to decide?
If you are still unsure about whether or not a fixed rate mortgage is right for you, then consult an independent financial advisor like a Mortgage broker . They will be able to help you find the best deal, as well as tell you whether or not the base interest rate is going to fall or rise. This will determine whether a fixed or variable rate mortgage is best for you.
Increasingly Canadians are choosing to renovate their homes these days.
Home renovations, whether just to improve the look of the home or adding an entire addition. A great upside to renovating is the numerous energy-saving things that can be incorporated into the renovation. This can save you money in energy savings. For example, installing new energy savings windows or high efficiency furnace can cut down on energy costs. One great way for homeowners to also save money is to install stucco, or the high-tech version, called Exterior Insulation and Finish System, or EIFS. While most homeowners refer to EIFS as stucco because of their similar look , stucco is not the same thing as EIFS, and vice versa. Stucco is applied wet and dries as a very durable, dense coating. Many historic older homes are stucco and attest to it’s durability, EIFS is composed of three separate layers and while very similar aesthetically similar to stucco, it has many more energy-efficient properties than traditional stucco. So why should a homeowner choose stucco or EIFS for their renovation project? Aside from the obvious cosmetic benefits, EIFS is also a great insulation. In contrast, traditional stucco is not as effective for insulation, as it is applied right onto concrete or brick, whereas EIFS can be installed onto those as well as masonry, plywood and gypsum-based sheathings. This versatility in combination with the multiple layers is what makes EIFS so energy-efficient. Most contractors don't do traditional stucco any more, it requires a lot of skill and experience. There are still good quality stucco contractors out there. When thinking of your renovation if you think that your home has adequate insulation, and just want to update the outside of your home, stucco is the less expensive option. Of course, alternatively, long-term savings costs associated with the added energy efficiency of EIFS might be beneficial to some homeowners. Applying stucco is an art that takes years to master, and installing it properly requires extensive knowledge and experience. Choosing the right contractor for the job is a minefield of fly-by-night operations and shoddy sub-contractors, and combined with the many nightmare stories you inevitably hear from friends and family, it is understandable that most homeowners view home renovations with more than a little trepidation. This is why organizations like StuccoContractors.ca exist. They have a team of personally selected contractors that they have worked with for a minimum of 5 years. These contractors specialize in stucco and EIFS, so homeowners can be assured that the project will not just get handed off to a sub-contractor. These contractors will have the knowledge and experience so the job will be done correctly. This is a Canada-wide service, so no matter where you live in the Great White North, you can be sure that you'll be matched up with the right contractors for the project. Homeowners who are seeking expert stucco or EIFS installment should look for a local stucco contractor who you can trust. As with any major home improvement project, research into all aspects of the project is absolutely vital before beginning. Not only knowing what you want and what it will cost, but also the reputation of the contractors and materials that will be used. One way to be assured of the contractors is to use a service such as StuccoContractors.ca . There are many options to improve the value of your home; make sure you make the right choice .