This "traditional" type of loan maintains its original interest rate throughout the entire life of the loan. (Any change in monthly loan payments will be due to increases in other charges like insurance or taxes that will naturally occur over time.) Fluctuations in market rates, over the term of your loan, won't have any impact on the amount of interest you pay because that rate is already "fixed." A Fixed Rate Mortgage loan may be a good choice if you:
- Want the security of knowing your interest rate will not change, nor will your monthly payment, unless property tax and insurance amounts change
- Plan to stay in this home for several years
- You don?t expect your income to increase significantly in the coming years
Fixed rate Mortgage Loans come in various terms such as 10, 15, 20 or 30 years. In determining the length of your loan, you may want to consider:
- Total amount of interest you want to pay over the course of your loan
- For example, the total cost of a 30-year loan in terms of the interest paid on the loan is higher than the total cost of a 10, 15, or 20-year loan. With a 30-year loan, you have the advantage of lower monthly payments due to the longer loan term.
- With a 15-year loan, you have the advantage of repaying the loan more quickly with higher monthly loan payments.
- Your ability to make high monthly payment
- If you can afford to pay more per month, you reduce the number of months you have to pay. Also, choosing a 15-year term will save you thousands in interest charges vs. the typical 30 year term
Another option to decrease the amount of interest you pay is to get a 30-year loan, so you don't lock yourself into higher monthly payments, but pay a little "extra" each month towards the principal when you are able to do so.
FNMA 97% 30
| Best Choice If: You would like to get into your home with a minimum down payment.
You need your monthly payments to remain fixed over the life of the loan.
| Advantages:You can contribute a minimum of $500 toward the required 3% down payment. The remainder can come from other acceptable sources such as a gift or grant.
Level principal and interest payments for the full term of the loan.
Allows for higher loan amount qualification and enhanced buying power.
| Disadvantages: Low down payment will cause monthly mortgage payments to be higher.
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30 Yr FixAsst
| Best Choice If:You plan on staying in the home long-term.
You need your monthly payments to remain fixed over the life of the loan.
| Advantages:Level principal and interest payments for the full term of the loan.
Allows for higher loan amount qualification and enhanced buying power.
No risk that changing market conditions will increase your monthly payments.
| Disadvantages:Higher rate than an ARM product. The 7/1 ARM is a better option if loan is paid-off within 7 years.
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30 Year Fixed
| Best Choice If:You plan on staying in the home long-term.
You need your monthly payments to remain fixed over the life of the loan.
| Advantages:Level principal and interest payments for the full term of the loan.
Allows for higher loan amount qualification and enhanced buying power.
No risk that changing market conditions will increase your monthly payments.
| Disadvantages:Higher rate than an ARM product. The 7/1 ARM is a better option if loan is paid-off within 7 years.
|
30 Year Fixed
| Best Choice If:You plan on staying in the home long-term.
You need your monthly payments to remain fixed over the life of the loan.
| Advantages:Level principal and interest payments for the full term of the loan.
Allows for higher loan amount qualification and enhanced buying power.
No risk that changing market conditions will increase your monthly payments.
| Disadvantages:Higher rate than an ARM product. The 7/1 ARM is a better option if loan is paid-off within 7 years.
|
30 Year Fixed
| Best Choice If:You plan on staying in the home long-term.
You need your monthly payments to remain fixed over the life of the loan.
| Advantages:Level principal and interest payments for the full term of the loan.
Allows for higher loan amount qualification and enhanced buying power.
No risk that changing market conditions will increase your monthly payments.
| Disadvantages:Higher rate than an ARM product. The 7/1 ARM is a better option if loan is paid-off within 7 years.
|
15/30 Balloon
| Best Choice If:You want a loan with: .
A 30 year payment for a term of 15 years.
| Advantages:Fixed rate of interest for 15 years
Increases your buying power.
30 year amortization.
| Disadvantages:The loan term is 15 years and must be paid off at that time.
No certain conversion option at the end of loan term.
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20 Year Fixed
| Best Choice If:You plan on staying in the home long-term.
You need your monthly payments to remain fixed over the life of the loan.
You would like to pay-off the loan balance quickly.
| Advantages:Level principal and interest payments for the full term of the loan.
No risk that changing market conditions will increase your monthly payments.
The loan balance will decrease more rapidly than a 30 Year mortgage.
| Disadvantages:Monthly payments are higher than a 30-year mortgage
|
15 Year Fixed
| Best Choice If:You plan on staying in the home long-term.
You need your monthly payments to remain fixed over the life of the loan.
You would like to pay-off the loan balance quickly.
| Advantages:Level principal and interest payments for the full term of the loan.
No risk that changing market conditions will increase your monthly payments.
The loan balance will decrease more rapidly than a 30 Year mortgage.
| Disadvantages:Monthly payments are higher than a 30-year mortgage
|
15 Year Fixed
| Best Choice If:You plan on staying in the home long-term.
You need your monthly payments to remain fixed over the life of the loan.
You would like to pay-off the loan balance quickly.
| Advantages:Level principal and interest payments for the full term of the loan.
No risk that changing market conditions will increase your monthly payments.
The loan balance will decrease more rapidly than a 30 Year mortgage.
| Disadvantages:Monthly payments are higher than a 30-year mortgage
|
10 Year Fixed
| Best Choice If:You plan on staying in the home long-term.
You need your monthly payments to remain fixed over the life of the loan.
You would like to pay-off the loan balance quickly.
| Advantages:Level principal and interest payments for the full term of the loan.
No risk that changing market conditions will increase your monthly payments.
This product will pay-off the loan balance the quickest.
| Disadvantages:Monthly payments are higher than a 30-year mortgage
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