A fixed rate mortgage, one of the most popular mortgage product offerings, is an amortizing mortgage loan that has a fixed interest rate (never changes) for the duration of the loan.
Fixed Rate Loan Highlights
- Monthly principal and interest payments remain the same for the life of the loan.
- Term lengths of a fixed rate loan are typically 30, 20 or 15 years. However, options may be available that enable broader loan term lengths options.
- A shorter the loan term length of a fixed rate loan should result in a lower interest rate.
- Prepayment penalties may not apply.
- Down payments vary however if less than 20% down payment is provided, then private mortgage insurance (“PMI”) is required.
The PROs and CONs of a Fixed Rate Mortgage
- Monthly Payments do not Change – because the interest rate cannot change, the monthly mortgage payment does not change.
- Attractive Option When Rates are Low – a fixed rate is an ideal option when interest rates are low. In these scenarios, the borrow can lock in at a low interest resulting in higher purchasing power and/or lower terms and loan lengths.
- Flexible Mortgage Term Options – options exist whereby loan terms can be as short as 10 years to as high as 40 years (in some cases). This array of term lengths offers the borrower the capability to select a mortgage that best meets their needs.
- Peace of Mind – eliminates borrower worries because the monthly interest + principal mortgage amount never changes.
- Higher Interest Rates Compared to Other Mortgage Programs – the interest rate on a fixed rate mortgage is higher than an adjustable rate mortgage (“ARM”) or an interest only loan. Paying a higher interest rate may limit the size of the mortgage one qualifies for.
- Higher Monthly Payment – a fixed rate mortgage with a higher interest rate than an ARM or an interest only mortgage results in a higher monthly payment.
- Locked into an Interest Rate if Refinance is not an Option – if interest rates decline and the borrower is unable to refinance – the borrower is stuck with an interest rate that is lower than the current market offerings.
Give us a call! One of our mortgage specialists would be happy to answer all of your questions and get you started with a great low rate today.
Working with MC Mortgage Group
- We put YOU first. We are committed to getting every client the very best possible deal every single time.
- MC Mortgage Group offers some of the most competitive rates in the Nation!
- Fast and efficient. We close most of our loans in 30 days or less.
- We offer a variety of loans. MC Mortgage will find you the loan that is right for you!!!