• Fixed Rate Loans

  • Fixed Rate Loans for The Mortgage

    Fixed rate loans for the mortgage are most standard forms of the home loan program, where the monthly principal and fixed interest payments never change during the lifespan of their loan term. Fixed rate loans are available in terms ranging from 10 to 30 years and will be repaid at any given time without penalty. Such a fixed rate mortgage is structured, either or “amortized” such that it will probably be completely paid off at the end of the loan term. There are likewise “bi-weekly” mortgages, which shorten the loan by calling for half the monthly payment every 2 weeks. (Because there are 52 weeks in a year, you make 26 payments, or 13 “months” worth, every year.)

    Even though you’ve got a fixed rate loan, your monthly payment may vary whether you have an “impound account”. In addition to the monthly loan repayment, a few lenders collect extra cash each month (from people that put fewer than 20% cash down if purchasing their dwelling) for its prorated monthly fee of property taxes and homeowners insurance. The additional cash is put into an impound account by the lender that uses it to pay the borrowers’ property taxes and homeowners insurance premium when they’re due. If either the property tax or the insurance happens to improve, the borrower’s monthly payment will be adjusted consequently. Nevertheless, the overall payments at a fixed interest rate mortgage are extremely stable and predictable.