The Basics: What is a Fixed-Rate Mortgage?
The essential component of a fixed-rate mortgage is that it has an interest rate that remains the same throughout the entire life of the loan. The stability and predictability this type of loan provides makes them the most popular type of home financing available. These are the ideal mortgages for Miami homeowners who want to know what they will be paying each month and want to avoid their interest rate being impacted by market conditions. Interested in learning if a fixed-rate mortgage is right for you? Speak with a professional mortgage lender from Point Mortgage Corporation today!
How Does a Fixed-Rate Mortgage Work?
Unlike a variable-rate loan, a fixed rate loan/mortgage does not increase or decrease with market fluctuations. For people getting long-term mortgages, fixed-rate mortgages are a great option as they are more predictable and will ensure fewer surprises down the road. In the USA, a fixed-rate mortgage loan can range anywhere from 10 to 30 years.
Did you know? — The 30-year fixed-rate mortgage is the most popular home loan in America, with almost 90% of all homeowners opting for it.
Types of Fixed-Rate Mortgages
We discuss the details of some of these types of fixed-rate mortgages on our loan options page, but here is a quick overview of some command fixed-rate mortgages you could get:
Conventional Loan — These typically come with stricter requirements for approval, such as a minimum 620 credit score.
FHA, VA, USDA Loan — These are less strict than conventional loans and are issued for military service members, veterans, and their eligible family members.
Conforming Loan — They adhere to FHFA requirements, such as loan limits, and can be still bought or sold on a secondary market.
Should you get a fixed-rate loan or an adjustable-rate loan? It all comes back to weighing your risks. If the market is likely to have rising interest rates over time, a fixed rate loan is great, but if the opposite is true you may be paying more than what current market conditions would otherwise stipulate. Of course, in that case you could always refinance the loan. Want help getting a fixed-rate mortgage? Founded in 2011, Point Mortgage helps people in Miami get the home financing they need to afford the home of their dreams (and their budgets). Get started today by getting in touch and getting prequalified for a fixed-rate home loan!