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 Fixed TIC
| Best Choice If:You plan on staying in the home long-term.
You think interest rates will increase.
You don't expect your income to increase significantly over the coming years.
You need to qualify for the largest loan possible. | Advantages:Excellent Fixed rate of interest.
Level principal and interest payments for the full term of the loan.
No risk that changing market | Disadvantages:You'll end up paying more in interest charges over the life of the loan.
Benefits of the fixed rate are not realized until after the 10th year. (10/6 ARM is a better option if loan is paid-off within 10 years.) |
15 Year Fixed TIC
| Best Choice If:You want:
You need to qualify for the largest loan possible.
You wish to purchase a desirable property that may otherwise be unattainable; percentage ownership in high cost areas.
Single-family residences and large condominium projects are out of reach or undesirable
| Advantages:Separate mortgage liability within a shared ownership structure.
Adjustable Rate Mortgage options offering competitive rates.
Fully-amortized repayments for the life of the loan with no pre-payment penalties
Desirable properties within larger cities that offers a sought after lifestyle and amenities
| Disadvantages:Adjustable Rate Mortgages are subject to rate adjustments throughout the life of the loan (ask your Mortgage Loan Consultant for specifics and options)
Shared ownership requires shared expenses for the projects property taxes and insurance managed by an HOA
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FHA 15 YR FIX
| Best Choice If:You plan on staying in the home long-term.
You think interest rates will increase.
You don't expect your income to increase significantly over the coming years.
You need to qualify for the largest loan possible. | Advantages:Excelllent Fixed rate of interest.
Level principal and interest payments for the full term of the loan.
No risk that changing market conditions will increase your monthly payments. | Disadvantages:You'll end up paying more in interest charges over the life of the loan.
Benefits of the fixed rate are not realized until after the 10th year. (10/1 ARM is a better option if loan is paid-off within 10 years.) |
10 Year Fixed Conforming
| Best Choice If:You want to own your home more quickly.
You want to retire debt free.
You'll be retiring in less than 30 years.
You want to stay in your home once you retire. | Advantages:Cut mortgage length by as much as 2/3rds.
Save significant amount of money in interest payments. | Disadvantages:Your monthly payment will be significantly higher than with a 30-year mortgage. |
15 Year Fixed Conforming
| Best Choice If:You want to own your home more quickly.
You want to retire debt free.
You'll be retiring in less than 30 years.
You want to stay in your home once you retire. | Advantages:Cuts the length of your mortgage in half.
Save significant amount of money in interest payments. | Disadvantages:Your monthly payment will be significantly higher than with a 30-year mortgage. |
20 Year Fixed Conforming
| Best Choice If:You want to own your home more quickly.
You want to retire debt free.
You'll be retiring in less than 30 years.
You want to stay in your home once you retire. | Advantages:Reduces the mortgage term by 1/3.
Save significant amount of money in interest payments. | Disadvantages:Your monthly payment will be significantly higher than with a 30-year mortgage. |
30 Year Fixed Conforming Agency
| Best Choice If:You plan on staying in the home long-term.
You think interest rates will increase.
You don't expect your income to increase significantly over the coming years.
You need to qualify for the largest loan possible. | Advantages:Excelllent Fixed rate of interest.
Level principal and interest payments for the full term of the loan.
No risk that changing market conditions will increase your monthly payments. | Disadvantages:You'll end up paying more in interest charges over the life of the loan.
Benefits of the fixed rate are not realized until after the 10th year. (10/1 ARM is a better option if loan is paid-off within 10 years.) |
VA 15 Year Fixed
| Best Choice If:You plan on staying in the home long-term.
You think interest rates will increase.
You don't expect your income to increase significantly over the coming years.
You need to qualify for the largest loan possible. | Advantages:Excelllent Fixed rate of interest.
Level principal and interest payments for the full term of the loan.
No risk that changing market conditions will increase your monthly payments. | Disadvantages:You'll end up paying more in interest charges over the life of the loan.
Benefits of the fixed rate are not realized until after the 10th year. (10/1 ARM is a better option if loan is paid-off within 10 years.) |
VA 30 Year Fixed
| Best Choice If:You plan on staying in the home long-term.
You think interest rates will increase.
You don't expect your income to increase significantly over the coming years.
You need to qualify for the largest loan possible. | Advantages:Excelllent Fixed rate of interest.
Level principal and interest payments for the full term of the loan.
No risk that changing market conditions will increase your monthly payments. | Disadvantages:You'll end up paying more in interest charges over the life of the loan.
Benefits of the fixed rate are not realized until after the 10th year. (10/1 ARM is a better option if loan is paid-off within 10 years.) |
