Fixed-rate home loans offer home buyers consistency over the entire life of the loan. At Spire Financial (A Division of V.I.P. Mortgage Inc.), our experienced loan specialists can help you get the perks of these fixed purchase loans. Whether you prefer a 15-year or a 30-year mortgage, you’ll find comfort that your fixed home loan rate is set in stone, and it cannot change or move up or down for the whole life of the loan. A fixed-rate home loan is the most common type among home buyers, and we will let you know why.
Fixed-rate home loans provide many perks, including long term stability. When you lock in your loan term, that’s it, meaning you’ll never be surprised. If you plan to keep the loan for more than seven years, then a fixed rate loan with a 15-year mortgage is probably the best idea, as it will keep your payment steady, allowing you to plan your finances more accurately.
While fixed rate mortgages are incredibly popular, they aren’t the only way to go. Adjustable rates are often helpful to homeowners, especially if they don’t plan on being in their home long term, which would make a 30-year mortgage less relevant. If you suspect you’ll have the home for fewer years, getting an adjustable rate loan can often save you money over the short term, making it an advantageous purchase loan.
Many homeowners struggle when deciding between a 15 or 30-year mortgage. Our loan experts can walk you through the pros and cons of each, helping you make the right decision for your future. A 15-year mortgage will come with a larger down payment, but you’ll pay less over the life of the loan. A 30-year mortgage is ideal for buyers who don’t have a ton of upfront capital, as the down payment and loan terms are a little easier to meet. However, over the length of the loan, you will pay more, and how much will depend on your specific situation.
In the US, it is allowed to pay early on your fixed-rate home loan. This will help you pay it off faster and save money on interest.
Paying extra on your fixed-rate loan means that the extra money you pay each month goes to pay down the principal of the home loan. The principal is the amount of money left on the loan that you still owe.
Beyond just paying extra each month on principal, as mentioned above, there are other ways to pay a fixed rate loan off sooner. The most popular way is doing bi-weekly mortgage payments. This is something your lender’s servicer can set up for you after the loan closes. The way it works is instead of paying your mortgage once a month, you instead pay half every two weeks. Since there are 52 weeks a year, you’ll make 26 half-payments, or 13 full payments. That extra full payment collected each year goes entirely to the principal and can cut off around 5 to 7 years from the length of your loan.
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