Daily News

MBA Urges Regulators To Avoid Invoking Suitability Standards
The Mortgage Bankers Association (MBA) recently made a preemptive strike against what it obviously perceives as the next threat against the mortgage industry - "suitability standards." Read more...

 

Basics Of Fixed Rate Mortgage

Fixed rate mortgage loans represent a great option for a very large number of people who are looking to purchase a home. A fixed rate mortgage loan is a loan that has the same interest rate, and therefore the same monthly payment for the duration of the loan. A fixed rate mortgage loan is exactly the opposite of an adjustable rate mortgage, or ARM loan as they are often known, and it has quite a few benefits.

Probably the most obvious benefit of fixed rate mortgage home loans is that they allow the homeowner to know exactly what their monthly mortgage payment will be each month for the entire term of the loan. This can be an important factor for individuals who live on a budget, when people are changing jobs, and that sort of thing. Knowing that your payment will always be the same will allow you to plan for future expenses much more easily.

Another benefit of fixed rate mortgage loans is that they are easier to understand. With an adjustable rate mortgage you may have a hard time understanding when it will change and what it will change to. When you have a fixed rate mortgage loan you will find that there is no confusion, instead you are comfortable with your loan because you know what the rate is now, what it will be in the future, and you'll be able to plan for it.

Many people are taken in by adjustable rate loans because the starting payments are really low. While low payments are nice, one thing that is great about the fixed rate mortgage home loans is that with each payment you are building equity in your home. In addition, you never have to fear that your payment is going to go up and you know all along the way that you are building equity and paying off the loan instead of just paying interest a lot of the time like you are when you make payments early on during your ARM loan.

Back to Articles