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Fixed Rate Loans Give You More Stability
A fixed-rate mortgage offers consistent monthly payments throughout the loan term, providing stability and predictability for homeowners.
This consistency simplifies budgeting and offers several key advantages for homebuyers. It provides predictable payments, ensuring that your principal and interest remain the same throughout the life of the loan. Fixed rate home loans offer protection from interest rate fluctuations, meaning that even if market rates rise, your interest rate will stay fixed. This safeguard helps protect you from unexpected increases in your payments. A fixed-rate mortgage also supports long-term financial planning, allowing you to focus on other goals, such as saving for education or retirement, without worrying about changing payments.
Fixed-rate mortgages come in a few different flavors, each with a different length or set of terms depending on the borrower. Here are the most common types:
30-Year Fixed-Rate Mortgages
30-year fixed rate loans offer a long repayment period, which typically results in lower monthly payments because the loan is spread out over more time. This is ideal if you want to maintain affordable payments that give you long term stability.
15-Year Fixed-Rate Mortgages
A 15-year fixed-rate mortgage has a shorter term, meaning you’ll pay off the loan in half the time of a 30-year mortgage. You pay less interest on the loan and build equity faster. If you are able to afford the higher payments, then this may be the option for you.
Fixed-Rate Jumbo Loans
A jumbo loan is a type of fixed-rate mortgage for a loan amount that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA). If you are in the luxury market, or just in a high-cost area, you may need to consider a loan like this.
Fixed-Rate FHA Loans
A Federal Housing Administration (FHA) loan is a type of fixed-rate mortgage that is insured by the government. Its core design is to help first-time homebuyers or those with less-than-perfect credit. You can get down payment requirements as low as 3.5% along with more lenient qualification criteria. One down side is that mortgage insurance may be required if your down payment is low, which can increase monthly payments.
Fixed-Rate VA Loans
A fixed-rate VA loan is available to current or former military service members and eligible surviving spouses. These loans are backed by the U.S. Department of Veterans Affairs. In most cases, no down payment is required, rates can be lower than conventional mortgages, and you may be able to avoid private mortgage insurance.
Fixed-Rate USDA Loans
A fixed-rate USDA loan is a government-backed loan for rural and suburban homebuyers who meet income eligibility requirements. These loans are provided by the U.S. Department of Agriculture. Typical requirements are more lenient if you meet geographic and demographic restrictions. If you qualify, you may be able to put down a low or no downpayment and lower your mortgage insurance rates.
How Fellowship Home Loans Can Help
We understand the importance of choosing the right mortgage. Our team is dedicated to guiding you through the process, ensuring you make an informed decision that aligns with your financial goals.
Contact us today to learn more about fixed-rate loans and determine if this option suits your home financing needs.
Get a personalized loan consult with one of our experts today.
Get a
personalized
loan consult
with one of our
experts today.
