Fixed-rate mortgage

Fixed-rate mortgage

Not all mortgages are created equal. For example, while some borrowers choose adjustable-rate mortgages (ARMs), the most frequent loan type is the fixed-rate mortgage. Yet even with fixed-rate loans, there is a range of options.

Contact Us To Know More
Modern couple buying house with mortgage

What is a Fixed-rate mortgage?

A fixed-rate mortgage is a home loan option with a particular interest rate for the entire term of the loan. Essentially, the interest rate on the mortgage will not change over the loan's lifetime, and the borrower's interest and principal payments will remain the same each month.

Click & Learn

20% Down payment
Perfect Credit
Interest Rates
Finding A House
30-Year Fixed-Rate Mortgages

20% Down payment

Myth

You need 20% down to purchase a home.

Fact

This isn't true. If you take out a conventional loan, you can buy a home with as little as 3% down.

Perfect Credit

Myth

You must have perfect credit to qualify for a mortgage.

Fact

Credit plays a significant role in your ability to get a home loan. However, this doesn’t mean you need perfect credit to buy a home.

Interest Rates

Myth

Mortgage interest rates are the same no matter what lender you work with.

Fact

The truth is that rates can vary from lender to lender. So for your financial safety, you should shop around when looking for a mortgage loan.

Finding a house

Myth

Find a house, then worry about a mortgage.

Fact

This is terrible advice at any time, but in a hot seller’s market like today’s, believing this myth can lead you to miss out on a home altogether.

30-Year Fixed-Rate Mortgages

Myth

A 30-year fixed-rate mortgage is always the best choice

Fact

If you can afford higher payments, you can own your home outright in less time and for less money with a 15-year fixed-rate mortgage.

Why consider a Fixed-rate mortgage?

A fixed-rate mortgage locks in both your interest rate and monthly payments for the entirety of your loan, providing the peace of mind that comes with stability. This is the most traditional form of a mortgage. Reasons to consider a fixed-rate mortgage include:

  • Predictable budgeting: Your repayment responsibilities will be clear.
  • Interest rate stability: Your payment will hold steady for the entire term of the loan.
  • Flexible terms: Most borrowers opt for a 30-year mortgage, but shorter periods like 15 or 20 years may be a better fit for your goals.

Fixed-rate mortgages are a good fit for most borrowers. They appeal to those who plan to own their home for a long duration and want peace of mind knowing their loan repayments will be predictable. Of course, if interest rates should fall during the life of the loan, borrowers could consider refinancing, but the goal is not to play the guessing game.

Types of Fixed-rate mortgages

The number of years attached to a fixed-rate mortgage isn't the only difference to consider. So here's a rundown of some of the vocabulary you'll see next to fixed-rate loans:

Conventional fixed-rate mortgages
Conventional fixed-rate mortgages generally come with slightly stricter requirements for approval. However, there are some exceptions to these rules. These loans are allocated by banks, credit unions, online lenders, and other types of lending institutions.

FHA, VA, and USDA loans
FHA, VA, and USDA loans have fixed rates and come with less strict requirements than conventional loans. FHA loans are broadly available, while USDA loans are assigned to specific rural borrowers. VA loans are reserved for military service members, veterans, and qualified family members.

Conforming
A conforming loan adheres to prerequisites from the Federal Housing Finance Agency (FHFA), such as loan limit, that enable it to be sold on the secondary market.

Non-conforming
Non-conforming loans, including jumbo loans, don't meet FHFA requirements. You might pay a higher rate to qualify and need to check off stricter standards regarding your credit score and cash reserves.

Amortizing
Most fixed-rate mortgages are amortizing loans, which means that your monthly payments go toward both the preliminary and the interest charges. 

Non-amortizing
Non-amortizing loans are considerably less common but come with an appealing benefit: significantly lower monthly payments that might only cover the interest for a while.

Hero Mortgage

We bring a customized, unique approach to mortgages. Our lending solutions use the perfect hybrid of human-driven insights and technical prowess to process loans faster and significantly reduce costs.

PHONE

(479) 250-4485

E-MAIL

info@heromortgage.com

ADDRESS

609 SW 8th Street, Suite 600
Bentonville, AR 72712

Name(Required)
Disclosure:
The content provided within this website is presented for information purposes only. This is not a commitment to lend or extend credit. Information and/or dates are subject to change without notice. All loans are subject to credit approval. Other restrictions may apply. Mortgage loans may be arranged through third party providers.
© 2024 Hero Mortgage Designed by Amplispot
Skip to content