Everything You Need to Know About Fixed-Rate Mortgages
75 percent of all home loans have a fixed rate. To learn more about this advantageous mortgage option and why it is so popular among home owners, here is everything you need to know about fixed-rate mortgages.
What is a fixed-rate mortgage?
A fixed-rate mortgage is a type of home loan where the principal and interest rate don’t fluctuate despite market changes. As such, the borrower will have to pay the same amount on their loan every month throughout the lifespan of their mortgage.
Why should you choose a fixed-rate mortgage?
The main benefit of choosing a fixed-rate loan is the predictability of its payments. When opting for a fixed-rate loan, you know exactly how much you owe each month. Unless the borrower decides to refinance, the rate that is agreed upon when the loan is initially issued is the rate that the borrower will pay until the loan is paid off. As such, there isn’t a risk that your monthly payment will shoot up due to market changes. This predictability makes it easier for homeowners to budget their expenses and provides them with more financial stability.
Common loan terms for fixed-rate mortgages
When opting for a fixed-rate mortgage, there are several different loan terms you can choose from. The most common loan term for a fixed-rate mortgage is a
30-year term which allows the borrower to make lower monthly payments over a longer duration of time. Those who would prefer to pay higher monthly payments in order to pay off their loan faster and incur less interest may opt for a shorter fixed-rate mortgage term such as 20, 15, or even as few as 10 years. Now that you know about fixed-rate mortgages,
Streamline Mortgage can help if you’re interested in choosing a fixed-rate mortgage for your home’s financing.
Streamline Mortgage is a leading
private lender in Nevada. We offer a wide range of advantageous home loan options with competitive rates and terms. For more information regarding our loan options or to easily apply for a loan online, contact us today.