A fixed rate mortgage is what many Americans are looking for now that we have all seen what happens when an adjustable rate mortgage resets and home owners do not have the money to make the payments.  The one major plus about a fixed rate mortgage is that it will be consistent throughout the lifetime of your home loan.  There will be no “resets” that increase your mortgage payment by as much as 200% and there will be no guessing games when it comes to how much you owe.  Each month you will get the same amount to pay, unless you start paying more which will reduce your bills on the back end of the home loan.

Getting the best fixed rate mortgage takes time and research.  If you just walk into a mortgage lenders office and ask for the best rate, they are going to test your knowledge of the market.  If they offered you a 5.5% mortgage rates today and you didn’t bat an eye, they know that you have not been following mortgage rate trends.  If you had been following average mortgage rates, you would know that daily mortgage rates have been in the 5.25% range.  Obviously there are many other factors when it comes to getting a low mortgage rate, but if they just generically tell you 5.5% I would question them and prove your mortgage rate knowledge.

One of the other important factors in getting the best fixed rate mortgage is the value of your home.  When you go through the refinance appraisal step, you will find out how much the bank really thinks your home is worth.  I have had many friends and family members who were shocked when they found out that their homes were worth up to 30% less than they expected.  If you have seen a foreclosure or short sale in your neighborhood or close by, it is likely the value of your home has went down quite a bit.  If your loan-to-value is higher than 105% you will likely be paying a higher interest rate.

The Obama Refinance plan has been increased to 125% loan-to-value, but this does not mean that if you are in that range that you will get the low mortgage rates that are being advertised.  You have the ability to refinance but that does not mean you are going to get the low daily mortgage rates that you see all over the internet and on television.  Ultimately, the financial condition you and your spouse are in will determine if the best fixed rate mortgage for you has a low interest rate.

UPDATE: July 4th – The most recent article on the best fixed rate mortgage is available here: Fixed Rate Mortgage – What Rate Can You Get? Getting the best fixed rate mortgage takes some time and effort when it comes to research.  Do not let mortgage lenders dictate what mortgage rate you get because you have not done your homework.  Let Subprime Blogger help you get the mortgage rate you want.

The best fixed rate mortgage available to you is determined by your current financial situation.  There are 40, 30, 25, 20, 15 and 10 year fixed rate mortgages available.  Obviously the lower the number of years, the higher your payments are going to be.  The good thing about getting a lower amount of years on your fixed mortgage rate is that you will pay MUCH less in interest.  Not only will you pay less because of the length of the loan, you will also pay less because the mortgage rate that you get will be much lower than those of a 30 or 40 year fixed rate mortgage; usually .5%.

The best fixed rate mortgage you can get is the one with the shortest amount of time and the lowest interest rate but unfortunately many Americans cannot get that mortgage in the current economic environment.  It has been drilled into the head of most Americans that getting a 30 year fixed mortgage rate is the only way to go.  Unfortunately, many people believe that.  I have friends and family who thinks there is no other option.  Little do they realize that they could save tens of thousands of dollars over the course of the loan.

With the current mortgage rate trend being tested to the upside, now would be a great time to get a shorter term mortgage rate to lock in at a much lower rate.  If you have been smart with your money, I would suggest you do this sooner rather than later because it is likely that we are going to see higher mortgage rates in the very near future.