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.
30 Year Rural Housing
| Best Choice If:Purchasing a home in a Rural Development designated area.
You need fixed monthly payments for the life of the loan.
You don't have extra money for a down payment.
You prefer fixed payments for the life of your loan.
You plan on staying in your home long term.
| Advantages:Consistent monthly payments.
Market conditions will not increase your monthly principal and interest payment. No prepayment penalty. No down payment required. | Disadvantages:Higher interest rate than other loan options with shorter terms.
More interest will be paid over the life of the loan.
Shorter term loans typically have lower interest rates. |
15 Year Fixed
| Best Choice If:You want to pay the loan off faster with least amount of interest. | Advantages:Pay off the home faster and pay the least amount of interest. | Disadvantages:Higher monthly payment |
20 Year Fixed
| Best Choice If:Flat monthly payments for the duration of the loan. | Advantages:Consistent monthly payments. | Disadvantages:Higher interest rate than available for some other loan options. |
10 Year Fixed 2nd Lender Portfolio Bank Statement
| Best Choice If:You are self-employed and need to use other income sources than tax returns. | Advantages:No Mortgage Insurance. For self-employed borrowers. | Disadvantages:Higher interest rate |
15 Year Fixed 2nd Lender Portfolio Bank Statement
| Best Choice If:You are self-employed and need to use other income sources than tax returns. | Advantages:No Mortgage Insurance. For self-employed borrowers. | Disadvantages:Higher interest rate |
15 Year Fixed Lender Portfolio Bank Statement
| Best Choice If:You are self-employed and need to use other income sources than tax returns. | Advantages:No Mortgage Insurance. For self-employed borrowers. | Disadvantages:Higher interest rate |
20 Year Fixed Lender Portfolio Bank Statement
| Best Choice If:You are self-employed and need to use other income sources than tax returns. | Advantages:No Mortgage Insurance. For self-employed borrowers. | Disadvantages:Higher interest rate |
30 Year Fixed
| Best Choice If:Flat monthly payments for the duration of the loan. | Advantages:Consistent monthly payments. Mortgage Insurance removed at 80% LTV. Flexible underwriting. | Disadvantages:Higher interest rate than available for some other loan options. |
30 Year Fixed Lender Portfolio Bank Statement
| Best Choice If:You are self-employed and need to use other income sources than tax returns. | Advantages:No Mortgage Insurance. For self-employed borrowers. | Disadvantages:Higher interest rate |
5 Year Fixed Lender Portfolio Bank Statement
| Best Choice If:You are self-employed and need to use other income sources than tax returns. | Advantages:No Mortgage Insurance. For self-employed borrowers. | Disadvantages:Higher interest rate |
FHA 15 Year Fixed
| Best Choice If:Flat monthly payments for the duration of the loan. Lower down payment requirements. | Advantages:Helps you get into a home with least amount of money down. | Disadvantages:Mortgage Insurance stays on for the life of the loan. |
FHA 30 Year Fixed
| Best Choice If:Flat monthly payments for the duration of the loan. Limited money to put down. | Advantages:Consistent monthly payments. Lower down payment requirements. Higher debt ratios. | Disadvantages:Higher interest rate than available for some other loan options. Mortgage Insurance stays on for the life of the loan. |
Home Ready 30 Year
| Best Choice If:Flat monthly payments for the duration of the loan.
You have limited funds to invest in a down payment. | Advantages:Fixed interest rate.
Level principal and interest payments for the full term of the loan.
No risk that changing market conditions will increase your monthly payments.
Closing costs can come from your own funds, a gift, grant or other permitted sources.
Reduced private mortgage insurance (PMI).
| Disadvantages:You pay more interest over the life of the loan due to higher interest rate.
|
VA 15 Year Fixed
| Best Choice If:You are a Veteran with VA Eligibility and are looking for a Fixed Rate Loan | Advantages:15 Year Fixed Rate loan to 100% Financing depending on your current eligibility |
VA 30 Year Fixed
| Best Choice If:You are a Veteran with VA Eligibility and are looking for a Fixed Rate Loan | Advantages:30 Year Fixed Rate loan to 100% Financing depending on your current eligibility |
10 Year Land
| Best Choice If:Flat monthly payments for the duration of the loan. | Advantages:Consistent monthly payments. Low down payment. |
10 Year Land Lender Portfolio Bank Statement
| Best Choice If:You are self employed and needing alternative income methods other than tax returns, such as bank statements. | Advantages:Alternative Methods to income calculation for self-employed. No Mortgage Insurance. Consistent monthly payments. Low down payment. | Disadvantages:Higher Interest Rate |
15 Year Land
| Best Choice If:Flat monthly payments for the duration of the loan. | Advantages:Consistent monthly payments. Low down payment. |
15 Year Land Lender Portfolio Bank Statement
| Best Choice If:You are self employed and need to use bank statements for income qualification rather than tax returns. | Advantages:Alternative method for self-employed borrowers. No Mortgage Insurance. Consistent monthly payments. Low down payment. | Disadvantages:Higher Interest Rates |
5 Year Land
| Best Choice If:Flat monthly payments for the duration of the loan. | Advantages:Consistent monthly payments. Low down payment. |
5 Year Land Lender Portfolio Bank Statement
| Best Choice If:You are self-employed and need alternative income other than tax returns. | Advantages:Alternative income options for self-employed. No Mortgage Insurance. Consistent monthly payments. Low down payment. | Disadvantages:Higher Rate |
