Fixed-Rate Mortgage (FRM): An interest rate, that remains fixed for the entire term of the loan. Common fixed rate terms are 15 and 30 years, your lender may offer other term times such as a 10, 20, or 25 years. A fixed interest rate may best be used by a borrower who has a fixed income.
A fixed rate gives some protection against a rise in market interest rates over the term of the loan. A fixed interest rate, therefore, avoids the interest rate risk that comes with an adjustable rate mortgage loan. Although a borrower may have a fix rate loan, the borrower must–and should–be aware that when escrowing taxes and insurance, their payment may fluctuate due to the changes in the local tax rates and the ever changing cost of home owners insurance.
We believe, in most cases, it may be best to get the longer 30 years fixed rate term for those on fixed incomes with higher debt to income ratios. Remember, it is easier to make an extra payment toward your principle in good times, than it is to be forced to make a higher monthly payment–when a hardship comes along. We do not want to see you in foreclosure or to be homeless.
If you have any questions or would like further assistance please contact us directly and we will try our very best to help wherever possible.
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