Fixed Mortgage
Your Fixed Mortgage Options
When you apply for a new mortgage, you’ll have two basic options when choosing what program is best for you. Fixed or Adjustable Rate Mortgage (ARM). From these two basic starting points hundreds of loan options evolve. The most conservative mortgage is a fixed rate mortgage and borrowers have many options to choose from.
The benefit of a fixed rate mortgage is that your payment and rate will never change. The rate is higher than an adjustable rate mortgage but with that higher rate comes more safety an security. The following are the length of mortgages loans with fixed rates:
10-year fixed rate mortgage
15-year fixed rate mortgage
20-year fixed rate mortgage
30-year fixed rate mortgage
40-year fixed rate mortgage (might have a balloon payment in year 30)
50-year fixed rate mortgage (might have a balloon payment in year 30)
Some lenders offer an interest only option (usually for 10 years) on their 30 year fixed rate loans. This would mean that after 10-years your payment would adjust because you are now paying back part of the principal.
When choosing which fixed rate mortgage term would be best for you consider your goals with the property. Even if your goal is to payoff the house in 15-years, you still might want to choose a longer fixed rate term. 15-year mortgages carry much higher payments and if you do choose the longer term you can always pay more towards your principal.
Kevin O’Connor
Mortgage Consultant
www.koloans.com
800.550.5538
California Mortgage
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