With a fixed-rate mortgage, the interest rate does not change for the term of the loan, so the monthly payment is always the same. While adjustable-rate mortgage programs can fluctuate based on the market conditions, fixed-rate mortgage programs will maintain a consistent rate for the lifetime of the loan. For borrowers who intend to live in their home for a prolonged period of time, this is typically the most popular loan program. Generally, the shorter the loan period, the more attractive the interest rate will be – however, a longer loan allows the borrower lower payments over a longer time. These fixed loan programs come with their own requirements as well as their own parameters of flexibility. Your loan officer will gladly take the time to go over the options available to you.
Payments on fixed-rate fully amortizing loans are calculated so that the loan is paid in full at the end of the term – regardless of the number of years chosen for the loan’s lifetime. In the early amortization period of the mortgage, a large percentage of the monthly payment pays the interest on the loan. As the mortgage is paid down, more of the monthly payment is applied toward the principal.
A 30-year fixed-rate mortgage is the most popular type of loan when borrowers are able to lock into a low rate. A 15 year fixed rate mortgage allows you to pay off your loan quicker and lock into an attractive lower interest rate when market conditions are favorable.
- Lower monthly payments with longer loan terms or lower overall cost with shorter loan terms
- The interest rate of the loan does not go up if interest rates in the market go up
- Payments do not go up – they stay the same for the duration of the loan
- Build equity in your property consistently
Conditions to Note:
- Higher monthly payment stays the same if interest rates go down
- Interest rate stays the same even if interest rates go down
No reason to fret though. . .You may be eligible to refinance! Contact your Loan Officer to discuss your options.
Working With Provident . . .
It’s much easier to plan for success when working with the right team. With Provident Lending Group, we offer our entire team’s extensive knowledge base of market conditions and lending programs to help put together a mortgage plan to help you secure the right financing for your home. We’re determined to help you make the lending process easy and streamlined. Contact us today to learn how we can help!