| This article will help prospective homebuyers or even | | | | base your monthly budget or even bi-weekly budget |
| those looking to refinance learn more about the | | | | from the amount you'll be paying each month towards |
| traditional 30 year mortgages or other fixed rate | | | | your mortgage. Because the rate doesn't change, |
| mortgage products. Knowing the basics about the | | | | neither does the monthly payment. This makes the |
| mortgages will help you determine if the brokerage, | | | | fixed rate mortgage very predictable. |
| bank or loan officer you've chosen to work with is in | | | | The other benefit to a fixed rate mortgage is that at |
| your best interest. This article gives the basic | | | | the end of the loan, you don't have a balloon payment |
| information about this traditional type of home loan. For | | | | or the need to come up with any other money that |
| those of you who are new to mortgages or new to | | | | you haven't already been paying. Some mortgage |
| the process of applying for a home loan, this article will | | | | products have a balloon payment that would require |
| be a valuable resource to introduce you to the basic | | | | you to come up with additional funds at the end of the |
| fixed rate mortgage. This is one of the easier | | | | term or cause you to refinance the balance in order to |
| mortgages to understand and also relatively easy to | | | | keep your home. |
| calculate. A basic understanding of the fixed rate | | | | On a typical 30 year fixed rate mortgage, you'll pay |
| mortgage will help you understand how other | | | | your monthly payment of which a percentage of that |
| mortgage products may differ from the fixed rate, but | | | | amount would go toward the principal and the other |
| also help you to ask intelligent questions when | | | | percentage goes towards interest. This is done on a |
| speaking with and evaluating a loan officer you may | | | | sliding scale, so the first years of the mortgage, you'll |
| potentially be working with. | | | | be paying more in interest to the bank than paying |
| This fixed rate mortgage is one of the more common | | | | down your loan. This is as designed by the banks who |
| mortgage products. Typically when people discuss the | | | | fund these mortgages. Their expectation is that they |
| need to get a home loan or a mortgage, or even a | | | | get their interest paid to them before you're "allowed" |
| refinance, they're often referring to the fixed rate | | | | to use more of your regular monthly payment to go |
| mortgage. Typically when you hear an advertisement | | | | towards the principal. This is all done behind the |
| for a mortgage company or other lending institution, | | | | scenes, but it is interesting to know that you won't start |
| you'll most likely hear rates quoted for a 30 year fixed | | | | paying more towards your principal than interest until |
| mortgage. There are certain requirements when | | | | year 22 of your mortgage. There isn't anything to |
| companies advertise mortgages that are based on a | | | | prevent you from paying down your mortgage early, |
| "truth in lending" act sponsored by the federal | | | | however, and may be a very good idea depending on |
| government. And although not followed directly in each | | | | your life situation. |
| state, when you hear ads for a specific rate, there | | | | Establishing your first fixed rate mortgage or even |
| should be an indication of what type of mortgage | | | | refinancing for the 10th time shouldn't be a complicated |
| product that rate is associated with. | | | | process. The key to getting this done is to find a loan |
| The fixed rate mortgages have a specific time period | | | | officer you can trust who will work with you and |
| with them, such as a 30 year fixed rate mortgage. | | | | educate you as needed so that you understand what |
| There are also 15 years which are probably the | | | | you're paying for. Because this is such a large dollar |
| second most common. I have also seen 20 year and | | | | amount that you'll typically be paying for a home, there |
| 40 year mortgages. Lenders have different programs | | | | are ways that you can get caught paying more than |
| that will work with what you are looking for. There are | | | | you should and even small percentage changes over |
| enough lenders out there that it would be uncommon | | | | the life of the loan may result in you paying thousands |
| to find a loan officer who couldn't give you multiple | | | | of dollars more in interest. There are a lot of mortgage |
| options with your loan duration. | | | | calculators out there as well you can use to give you |
| Fixed rate mortgages have the same payment for | | | | some rough estimates. |
| each period. The benefit here is that you are able to | | | | |