If you prefer the peace of mind that comes with knowing that your interest rate is fixed (for the life of the loan), and therefore so is your payment, then the fixed rate mortgage may be the perfect mortgage for you. As a matter of fact, it’s apparently the right choice for the majority of Borrowers as it is the most common loan option chosen. So, what makes it so popular? Let’s take a quick look…
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Regardless of what is going on in the economy, or volatile fluctuations in the market, you’ll have the peace of mind of knowing that your interest rate will NOT move one smidgen.
A fixed rate will ensure that you’ve got a payment that won’t move as well. This allows you to do some longer term budgeting as you have the mortgage piece fixed. It’s important to mention that the fixed portion of your mortgage payment is the principal and interest portion. Your escrows may adjust as changes occur with your property taxes or homeowner’s insurance.
The fixed rate mortgage is available in a number of term options. The most common are the 30 year, 20 year, and 15 year terms. The term you choose indicates the time it will take you to pay off the mortgage if you pay the standard (no extra) payment. However, if you make additional payment towards principal from time to time you will reduce the amount of time it takes to pay off your mortgage.
For example, if you have a 30 year mortgage and each month make an additional payment towards the principal you may have your home paid off in 15 years. The 30 years is just the maximum amount of time it will take you if you pay the standard (no additional) payment. There is no penalty for paying your mortgage off earlier than scheduled.
However, if you choose a 15 year mortgage, you do not have the option to pay it out over 30 years. You can not extend the term without refinancing. It’s okay to shorten, or pay it off ahead of schedule, but you can not extend past the defined term.
At Loan Simple we provide the most comprehensive fixed rate mortgage products available in the market. We’ve spent a LOT OF TIME seeking out the best fixed rate programs available to ensure that you’re only considering the best in breed.
It couldn’t be more Simple to get a fixed rate mortgage then this…
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