Fixed Rate Mortgage
A fixed rate mortgage is a home loan option with a set interest rate for the life of the loan. The interest rate will not change despite any discrepancies or changes in the housing market; the rate locked in during the closing disclosure will be the rate for the duration of the loan.
If you are considering a fixed rate loan, there are many options. Borrowers can choose a 15-year, 30-year, or a flex term. A 15-year term allows borrowers to pay off their loan early with low interest rates but higher monthly payments. A 30-year term allows borrowers to have lower monthly payments due to the loan being stretched out further, but often with slightly higher interest rates. Borrowers can also choose a flex term which allows them to customize the length of their loan, between 8 to 30 years, with a fixed interest rate. In addition to loan terms, borrowers can also shop around for loan options. Fixed rate loans are offered for conventional, FHA, VA, USDA, jumbo, confirming, and non-conforming loans.
One of the many great benefits of fixed rate loans is the consistent and predictable monthly mortgage payments. The only situation that can alter the payments is if homeowners’ insurance or taxes fluctuate, otherwise borrowers are expected to see the same monthly payment for the life of the loan.
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