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Fixed Mortgage Interest Rate - Fixed Mortgage Interest Rate - Mortgage Rates History and Patterns, Finding the Best Fixed Interest Rate Mortgage

Options and Rates

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In the early part of the 2000s, many homes were bought with adjustable rate mortgages. After the sub-prime mortgage crisis that began in 2007, however, fixed interest mortgage rate mortgages are much more common than adjustable rate mortgages. This has lead many potential homeowners to search for ways to find the best fixed mortgage rates.

Mortgage Rates History and Patterns

While mortgage rates rose in a mostly consistent pattern from the 1940s until 1970, going from about 2% to about 8%. Through the 70s and 80s, the rate spiked to about 20.5% by the middle of 1981, and then plummeted to about 7.75% by early in 1987. Until the late 1990s, rates stayed between 8% and 10%, and started to drop through the 2000s. After the housing crisis that began in 2007, rates fell to their lowest points since the mid-50s.

Many assume that the daily pronouncements from the United States Federal Reserve (the Fed) are the figures for the best fixed mortgage rates. However, the Feds’ figure is the interest rate that banks charge each other on certain loans. Usually, however, the prime mortgage rates (the rates given to those with the best credit), tend to follow the pattern of the Federal interest rates. For example, if the Fed lowers its rate by 0.5% to 1.0%, then prime mortgage rates might lower by 0.75% to 1.5% or so.

Finding the Best Fixed Interest Rate Mortgage

Until the housing boom of the late 1990s and early 2000s, most mortgages were fixed term (usually 15 or 30 years) and had a fixed rate. In the early part of the 2000s, it was easier for many people with less than perfect credit or employment histories to get loans. Because of the subprime mortgage crisis, it is much more difficult to obtain a mortgage than it was in 2005 or 2006. Therefore, when you are beginning to look for a fixed rate mortgage, you need to be prepared to provide proof of sufficient income. Also, if you have bad credit, then it will be much more difficult to obtain a fixed rate mortgage. Finally, unlike the early 2000s, it is very difficult to get a loan with no money down, so you will need to be prepared to put down 5%, 10%, or, preferably, 20% of your purchase price.

If you have sufficient credit, income, and funds for a down-payment, then you can begin looking for a fixed interest mortgage. The first and best rule that you should follow is to shop around for the best deal. While doing this, try to improve your credit by checking your credit report and fixing any mistakes you might find. Also, be sure to pay your bills on time, and if possible, try to pay down your credit card bills or other debts. Also, while you are shopping for a home, do not apply for any further lines of credit.

Generally speaking, fixed rate mortgages have either 15 or 30 year terms (although occasionally length terms are also available). Typically, the shorter the term of the loan, the better rate you will be able to get.

Once you have shopped around enough to know what your options are, then as much as possible, try to get pre-approved for a mortgage. This will provide you with a realistic idea of how much you can afford and which homes you can consider, and you will be well on your way to finding your dream home.

Fixed Rate Mortgage Uk - Fixed Rate Mortgages in the UK - Finding a Fixed Rate Mortgage in the UK, UK Mortgage Rates - Basic Information [next] [back] High Rate Savings Account - Five Steps to Finding the Right Savings Account - Find the Best Rates, Check Online Reviews, Check FDIC Status - Choosing a High Yield Savings Account for Your Retirement

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