Fixed Rate Mortgages
The fixed rate mortgage is the most popular and simplest home loan. This type of loan is simple because it is predictable and makes it easier for you to plan your budget if you know that each month you will pay a set mortgage payment. The interest rate and monthly payments remain the same over the life of the loan.
Each monthly payment on a fixed rate mortgage loan includes interest on the outstanding principal plus repayment of a part of the principal borrowed. This loan type assures the lender that the loan will be paid off at the end of the term set forth in the mortgage contract.
You should always check with several different mortgage lenders to compare loan rates, fees, and points. You will find that the loan rates, fees and points will vary greatly among different lenders. After checking with different lenders, you will find that Mortgage Solutions offers loan rates, fees and points that can't be beat. You should make an effort to obtain a home loan that suits your financial needs.
In addition, each monthly payment on a fixed rate mortgage loan may also include a payment to an escrow account. The escrow account is used for the purpose of paying insurance premiums and property taxes. All homes that are financed require insurance coverage throughout the life of the loan. This type of insurance coverage is called a homeowner's insurance policy.
All homeowners must pay property taxes. The amount of property taxes that you pay will vary from county to county. Insurance premiums and property taxes can increase or decrease over the life of the loan. Thus, the total payment may change only if there is an increase or decrease in the escrow payments.
Usually, a standard fixed rate mortgage loan covers 80% of the cost of the home, or appraised value, which ever is lower. The remainder is the cash down payment that you must provide at closing. The mortgage lender also charges discount points as a condition of granting a loan to you.
Each point requires you to pay an amount equal to 1% of the loan amount in cash at closing. The lender is required by law to provide you with a good faith estimate of all expenses associated with your mortgage loan at the time of application.
Under certain circumstances, you may be able to get a fixed rate mortgage loan that covers more than 80 % of the cost of the home or its appraised value based on the loan-to-value ratio of the property. Also, it is possible to get a loan for more than 80% of the cost of the home if the loan is insured.
Fixed rate mortgage loans can be insured by Federal agencies such as the Federal Housing Administration (FHA) or the Veteran Administration (VA) or by private mortgage insurance companies (PMI). However, federal and private mortgage insurance require additional premium payments at closing. Also, you may be required to pay an annual fee of 0.25 % to 0.50 % of the principal.
If you are considering a fixed rate mortgage loan, you will find that Mortgage Solutions will make sure that you understand all the terms of the loan and the options available to you. You should also know that we will offer you the least expensive fixed rate mortgage loan the first time around.
To make your visit to our website a positive one, feel free to take your time looking around or simply fill out our 60 Second Loan Application and someone will contact you shortly.
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