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With a fixed-rate loan, the monthly payment of principal and interest never changes for the life of the loan. Your property taxes may go up if the value of the property increases, which may also affect the cost of your homeowner’s insurance premium. Many homeowners choose a fixed-rate loan for the long-term stability it provides.

Fixed-rate loans are available for both short and long periods of time: 30-year,20-year, 15-year, and sometimes 10-year. Some fixed-rate mortgages are structured as”biweekly” mortgages that shorten the life of your loan. Payments are due every two weeks, a total of 26 payments a year — which adds up to an “extra” monthly payment every year.

During the early amortization period of a fixed-rate loan, a large percentage of the monthly payment goes towards the interest, and a much smaller part towards the principal. That gradually reverses itself as the loan ages.

More Recent Programs

• HELOC
  In the last 6 years or so Home Equity Lines of Credit have been offered as first mortgages not just lines of credit on top of a first mortgage. These loans are typically tied to Prime Interest in some way and may vary monthly or offer some fixed period.
• Adjustable Rate Mortgages
  ARM’s came out in the early 1980’s and there are many variables in every ARM not just the interest rate. Speak with one of our Mortgage Consultants for a thorough understanding of these products. The start rate may be the least of your concerns.
• 40yr Loans
  If you want this long of a term it would probably make sense for you to choose an Interest Only loan and then pay down whatever you wish month to month.

All of these products have various guidelines and restrictions which accompany them. Here is a short list:

• Loan amounts: Loans under $417,000 are Conforming. Loans over $417,000 are Jumbo.
• Credit Grades: All programs have credit score guidelines. You will hear the labels “A,B,C,D” loans or “Prime and Sub Prime” loans. Interest rates and loan terms are adjusted to fit the borrower’s qualifications including credit scores.
• Cash: Typically the more money you put down on your purchase or the more equity you have left in your home when you refinance the better the rates and terms. You can usually borrower 100% of the homes value if you have the credit and income to support the payments.
• Income: Proving you have the income to support paying your debts will again get to better rates and terms. Loan programs are available with little or no proof of income but they have accompanying higher rates. Such loans are more available to individuals with good credit as it is generally assumed that borrower’s with good credit know what they can afford.
• The marketplace is filled with a variety of products from the very simple to the complex. We suggest that you speak with a mortgage professional who can guide you to the right program for your personal and financial requirements.
• Seconds: Seconds are separate loans and are subordinate to the first mortgage. Seconds come in all forms similar to first mortgages.
• Debt Consolidation Loans: These are refinance loans which encumber some of the equity in your property in order to pay off some shorter term, higher payment debts like credit cards.
• Many individuals use Debt Consolidation Loans to improve their credit scores and then obtain a low rate first mortgage which helps them in the long term. You should consult one of our mortgage professionals before choosing a program.