Fixed Rate Mortgage
The most predictable loan there is. Your rate is set at closing and never moves, so the principal and interest portion of your payment on the last month is the same as the first.
In plain language
A fixed rate mortgage locks your interest rate for the entire life of the loan, usually 30 or 15 years. Nothing about the market changes what you owe each month.
Your total payment can still move a little over time, because property taxes and insurance are reassessed. The loan itself does not move, and that is the part most people are worried about.
This is probably you if
- You plan to stay in the home for a while, or you simply do not want to think about your mortgage again
- You want a payment you can budget around for the next decade
- You would rather have certainty than gamble on rates falling
Three steps, in order
- We agree the term. Thirty years keeps the payment lowest; fifteen costs more each month and far less overall.
- Your rate is locked while your loan is processed, so a moving market cannot change the deal underneath you.
- You close, and the principal and interest figure you signed is the figure you pay every month until it is paid off.
What people ask me
It costs far less interest overall and builds equity much faster, but the monthly payment is significantly higher. A good middle path is a 30 year loan with extra principal paid voluntarily, which gives you the shorter payoff without being locked into the higher payment when a hard month arrives.
Yes. There is no prepayment penalty on the loans I place. Every extra dollar goes straight to principal and takes months off the back end. The purchase calculator will show you exactly how many.
Almost always the escrow account. Property taxes were reassessed or your insurance premium rose, and the lender collects a twelfth of the new figure each month. Your principal and interest did not change.
Worth a look while you are here
FHA Home Loan
A lower bar to clear. Built for buyers with a smaller down payment or a shorter credit history.
Read moreVA Home Loan
No down payment, no monthly mortgage insurance. The strongest loan in the country, if you earned it.
Read moreRehab Loan
Buy the house and fund the work in one loan, at mortgage terms.
Read moreThink Fixed Rate Mortgage might be the one
Let us confirm it against your actual numbers before you fall in love with a house.