What is a Fixed Rate Mortgage?

A fixed rate mortgage is a loan in which the interest rate remains constant over the life of the loan. The most common fixed rate mortgages are 15 and 30 year terms,although 10, 20, and 25 year terms are also available.Fixed rate mortgages are popular in the U.S. because interest rates are constant over the life of the loan and people like the predictability and stability of fixed rate mortgages.*If you expect to be in your home for 5 years or less, an adjustable rate mortgage (ARM) may be a more cost effective alternative than a fixed rate mortgage. If you expect to be in your home for longer than 5 years, a fixed rate mortgage is usually the better choice.

Making the Choice
As always your payment will be based on the interest rate you receive, the total amount of the loan and the actual interest amortized over the total term of the loan. It’s important to remember to choose a payment that fits comfortably within your budget while providing the most value for your dollar.Our expert loan officers will work with you closely to help you make the right decision.

$1000 Monthly Payments – How Do the Numbers Add Up For You?
For most people, determining how much they spend on a home comes down to how much money they can dedicate to monthly payments. You can approach this calculation in a couple of different ways. And what you decide really depends on your mindset in how you view a home. Below are examples of how 2 different families may manage $1000 monthly house payments.

30 Years For the Aspirational Couple
On the other hand, someone with more of an aspirational focus may want to get as much house as their monthly payment will allow. In this case, a 30 year mortgage may be more attractive to them.

With a monthly budget of $1000, the aspirational couple will target homes in the $190,000 range. A 30 year mortgage at 4.81% of this home will be about $998 per month.