Fixed Rate Home Mortgage Loans

Why Homeowners Select this Type of Mortgage Loan
•	Fixed Rate and Terms:	interest rate and monthly payment amounts are fixed for the life of the loan
•	Ability to Budget:	homeowners can budget how much they need to set aside for the mortgage payment
•	Price Stability :	homeowners like the stability of a product
•	Easily Understood:	homeowners can easily understand how the product works
Disadvantages of this Type Loans
•	Additional Costs:	fixed rate are generally higher rates than adjustable rate and hybrid mortgages
•	Time Expense Factor:	the avg. homeowner may note be in the home long enough for the full 15- and 30-year term

Fixed-rate conventional mortgages are the easiest mortgage loan for home buyers to understand.
Reason: the monthly mortgage payment and interest rate are fixed — these loan repayment amounts will never change.

Note: your total monthly payment may change if the escrow payment goes up or down depending on the change of your tax and insurance assessment.
The fixed rate mortgage is perfect for home buyers who are on fixed incomes or who do not like to see adjustments made to their mortgage payment.

15-Yr vs 30-Yr Fixed Rate Mortgages:

You can choose the standard 30-year fixed rate mortgage or pay off your home loan faster with a 15-year fixed rate mortgage.

The 30-year mortgage term has lower monthly payments, but your APR will be slightly higher.

The 15-year fixed rate mortgage term will have a slightly higher monthly payment, but you will usually pay a lower APR.
The APR on a 15-year mortgage is about 0.05 to 1.0 percent lower than the standard 30-year mortgage. You will also pay your loan off quicker saving thousands of dollars in total interest charges.

Review this cost comparison for a mortgage loan of $100,000:

	15-Year	30-Year
Interest Rate (APR):	7.50%	8.00%
Monthly Payment:	$927.01	$733.76
Number of Payments:	180	360
Total Money Spent:	$166, 862	$246,149
Total Interest Paid:	$66,862	$164,149

The 15-year mortgage is popular among young homebuyers who have sufficient income to pay off their mortgage before their children start college.

Their home equity builds up quickly in a shorter period giving them additional financing options for buying a car, paying for college, saving for retirement, etc.

For more information about using the equity in your home: visit our site at YourEquity.com.
Compare the cost difference between the 15 Year and 30 Year Fixed Rate Mortgage by running two loan scenarios:

loan comparison calculator

another view from Dinkytown.net:
http://www.dinkytown.net/java/MortgageCompare.html

Other Repayment Options:

Some lenders may offer other repayment terms other than the standard 15-year and 30-year term.
Other terms may include: 10-Year, 20-Year, 25-Year, and in some cases, 40-Year terms.
General rule to remember: the longer the term, the higher the interest rate that you will be charged and the greater amount of interest you will pay over time.

Prepayment Options:
If you like the option of paying off your mortgage faster with a 15-year term but currently don't have the finances to pay the higher monthly payment, consider pre-paying your mortgage a little each month.
Example: start with a fixed rate 30-year term. You will be required to pay a minimum amount each month based on a 30-year amortization schedule.

You can pay a little extra each month by sending in an amount that is over the minimum amount required.
You can pay as little as $1 over the minimum requirement to as much as you like up to your available mortgage balance on your loan.
Please note that your minimum payment amount will remain the same each month no matter how much you prepay.
Paying an additional amount each month will reduce your mortgage balance over time where you can pay it off anywhere from 1-30 years (depending on the amount you prepay over time).
This "pay a little extra" option allows you to budget your finances so that you can prepay when circumstances allow.
The prepayment option is for homeowners who have the discipline and budget to prepay a little extra each month in order to take full advantage of the reduced cost.
You can discipline yourself by establishing a reoccurring online payment schedules through your financial institution.

You can also use an outside bill paying service to make your payments. But there is a cost to such services.

See our information on prepayment management at our affiliated site Pickmymortage.com.
Note: some mortgage lenders penalize on prepayment. If a lender offers you a mortgage product that has a prepayment penalty, negotiate the terms to have that prepayment clause removed.

Also notify your lender that any extra cash over the minimum payment is for reducing the mortgage principal, and is not to be used for paying non-accrued mortgage interest.

Accelerated (Bimonthly) Payments:
Many lenders offer the accelerated repayment schedule — this allows you to pay half of your monthly mortgage payment every two weeks.
For example: say your monthly mortgage payment equals $1000. Under the accelerated payment schedule, you will pay $500 every two weeks.
These payments will equal to 26 bimonthly payments, or equivalent to 13 monthly payments.
Under this plan you can payoff your 30-year loan in about 23 years saving you in total interest charges.
Another way to reduce your loan in the same way is to prepay an additional 1/12th of your monthly payment each month.

You will then pay $1,083.33 each month, which will reduce your payoff time in about 23 years.
We have more information about the accelerated program at our affilated site PickMyMortgage.com. Click here.

Let us find a lender near you with the best rate and terms.

let's start by defining your goals

*The recommended product, term and use are listed as illustrative purposes on how you might use the equity in your home. Please note that your circumstances may be different and that the recommended product, term and use may not fit your particular need.

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FIXED RATE MORTGAGES