30-Year Fixed Rate Mortgage.

Among the most affordable and popular fixed rate options is the 30-Year fixed.

“30-Year”

indicates that the term of the loan is 30 years meaning payments of principle and interest will be spread out over that time. “Fixed” indicates that the interest rate will remain the same throughout the life of the loan, and will not fluctuate even as the market does.
Monthly payments are kept low compared to other loans given payments are spread out over a thirty year term, making this kind of loan ideal for several different situations. Often times people are able too stretch their budgets further given monthly payments are lower, and future payments are far more predictable than those on an Adjustable Rate Mortgage (ARM). These loans are also particularly good for those looking to purchase a home they plan to occupy for a long time.

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Conventional Mortgage.

“Conventional” loans or

“conforming”

loans are mortgages that conform to established guidelines of loan limits and qualification standards. These types of loans often feature lower interest rates than FHA, VA, or Jumbo Loans given the standards they are set to bring a certain level of security to the lender.

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Shorter Term Mortgage.

For those looking to pay their loans off quicker, or trying to more rapidly build equity, a shorter term loan of 15 or 20 years may be a better option.

These types of loans

are usually more popular with those looking to refinance, though many people find they fit their financial needs for primary mortgages as well. 20-year mortgages in particular are often being seen as a happy median between 15 and 30 year mortgages. 20-year term loans give the borrower a lower monthly payment than a 15-year mortgage, while also amortising quicker and reducing the total amount of interest paid on a 30-year mortgage. While not perfect for everyone, 15-year mortgages do offer several advantages - particularly to those whose income is constant and predictable. Given 15 year mortgages often offer among the lowest interest rates (sometimes up to 1% lower than their 30-year counterparts), they will cost you as the borrower the least in the long run and allow you to pay your home off the quickest. Though, it is important to note that these benefits do come at a higher monthly cost and it is very important that income is carefully considered and any reduction in income will not cause you to no longer be able to afford your mortgage payments. While these are among the most popular fixed rate options, they are not the only ones. Contact us today and let us tailor a mortgage specific to your needs, financial situation, and short & long term goals!

Amortized Fixed Rate Mortgage.

Amortized loans quite simply refer to the monthly payments of a loan being laid out for the life of the loan in what’s called an

amortization schedule.

This schedule will detail every payment that is to be made on the mortgage from the time of consummation, to the date at which the loan will be paid off. This can be very useful to a borrower since they can more accurately predict financial expenses and better plan for the future. Having this schedule takes the unpredictability out of what is often a borrower's largest reoccurring financial expense. This can in turn help ensure budgeting, saving, and long term financial planning can all be laid out and calculated more accurately.
Since the interest rate and term are fixed, the lender is able to show all future payments given market fluctuations will not affect the loan. As the loan gets closer and closer to being paid off, payments will often reflect more going toward principle and less to interest.

Non-Amortized Fixed Rate Mortgage.

Often referred to as a

“balloon mortgage”,

these types of loans still incorporate a payment schedule with a set maturity date, though the payments as they are scheduled are not structured to pay off the entire mortgage by the maturity date. Instead, a balance will remain at the end of the payment schedule, which must be paid in one single “balloon” payment. While this type of mortgage benefits from having lower payments, it is important for the borrower to be fully aware of the large upcoming payment and carefully plan to ensure they will have the means to make the payment when it comes due.