What Is a 30-year Fixed-Rate Mortgage? Simply put, a 30-year fixed-rate mortgage is a home loan that has a fixed interest rate for a term of 30 years. With this type of loan, your monthly payments will never change. However, you should still account for fluctuations in fees such as property taxes and homeowner’s insurance premiums. This is one of the most common types of mortgage loans, as there are many features that make it attractive to people in a variety of situations.
What Are the Advantages?
Since this mortgage type has a term spanning three decades, the monthly payments on it are relatively low compared to others. In combination with the fact that your mortgage payments will remain at the same interest rate, you can count on it to be predictable. If you can lock in a mortgage loan at a great fixed interest rate, then you are set for the next 30 years—you should be planning on staying in your home for more than seven years.
What Are the Disadvantages?
The major disadvantage of a 30-year fixed-rate mortgage loan is that it’s simply more expensive than shorter-term loans. Since you’re borrowing for a long period of time, you’ll be paying more in interest over time. This has the additional effect of building equity at a much slower pace, as this loan type spreads the principal payments evenly throughout the duration of the loan. Ready to speak further? Contact us now to see if a 30-year fixed-rate mortgage in Las Vegas or Reno, NV, is right for you. 