Fixed Rate Mortgages

A fixed-rate mortgage is a financing option that sets a specific interest rate for the entire term of the loan regardless of future market conditions. Fixed-rate financing is the most common home loan for consumers.

The term of the fixed-rate loan can be customized to just about any length of time that suits you, but the most common initial terms are: 15-year, 20-year, 25-year, and 30-year. The shorter the term, the larger your monthly minimum payment will be. Conversely, the longer the term, the lower your minimum payment will be. Please note that just because you start with a 30-year term, you are not required to keep the mortgage for 30 years. You can pay extra money each month and have those additional funds applied directly toward your principal balance. For example, you could have your 30-year loan paid off in 15 years if you make the 15-year payment amount throughout the payback period. So, a longer term may simply provide financial flexibility for you.

Traditionally, shorter terms mortgages will provide lower interest rates, but in periods of economic uncertainty, something occurs that is called an inverted yield curve which has an affect within the mortgage industry whereby 15-year rates may be the same or worse than longer term loans. This is another reason why working through this process with a financial expert is important.

Everyone’s situation is unique, and we are here to guide you based on your specific financial needs. Give us a call and together, we will customize a loan that makes sense for you.