Personal Finance

Fixed-rate conventional mortgages are the easiest mortgage loan for home buyers to understand as the monthly mortgage payment and interest rate amounts will never change. A fixed-rate mortgage is a loan where the interest rate on the mortgage note remains the same through the entire term of the loan. Fixed-rate mortgages are available in 15-, 20-, 25- and 30-year terms. The fixed-rate mortgage is perfect for home buyers who are on fixed incomes or who do not like to see adjustments made to their mortgage payment. Note that your total monthly payment may change if the escrow payment goes up or down depending on the change of your tax and insurance assessment. Some mortgage loans are available for shorter terms with a balloon, lump sum payment, at the end of the term. A newer type of mortgage is called a hybrid fixed-rate — combining fixed-rate and adjustable-rate mortgages (ARMs) — meaning the rate is not fixed for the entire term of the loan.

Tags: fixed-rate mortgages, mortgages