Fixed
Rate Mortgages
The most
common type of mortgage program where your monthly payments
for interest and principal never change. Property
taxes and homeowners insurance may increase, but generally
your monthly payments will be very stable.
Fixed rate
mortgages are available for 40 years, 30 years, 20 years,
15 years
and even 10 years. There are also "biweekly" mortgages,
which shorten the loan by calling for half the monthly payment
every two weeks. (Since there are 52 weeks in a year, you
make 26 payments, or 13 "months" worth, every
year.) Most lenders set you up with a monthly payment at
the loan closing.
Then, offer you the biweekly option shortly after you have
proven a timely payment history.
Fixed rate
fully amortizing loans have two distinct features. First,
the interest rate
remains fixed for the life of the
loan. Secondly, the payments remain level for the life
of the loan and are structured to repay the loan at the end
of the
loan term. The most common fixed rate loans are 15 year
and
30 year mortgages.
During
the early amortization period, a large percentage of the
monthly payment is used for paying
the interest
. As the
loan is paid down, more of the monthly payment is applied
to principal . A typical 30 year fixed rate mortgage
takes 22.5
years of level payments to pay half of the original loan
amount.
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| To Refinance |
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