Fixed Rate Mortgage
Fixed Rate
Mortgage
These loans are exactly what it means, a loan that is set for the life of the
loan, it does not change, and your monthly payment does not change through the
life of the loan. There are also modified fixed rate mortgages called ARMS or
adjustable rate mortgage.
Before you shop for a loan online. Find out what your local bank is
offering for a fixed rate mortgage and use that as your guide. There are a lot
of companies on the internet searching to take advantage of you. The first thing
is a much lower interest rate than your bank. Most likely you will never see
that interest rate even if you are the "perfect customer".
Once they have
their foot in the door they will say anything to keep you.
This is what you should look for:
- Interest rate reasonable
- All closing costs in writing via fax or email
(Look for any
junk fees
if there are any RUN). We all use the same lenders across the country. How we
are different than everyone else is; Low overhead, no splits with the professional loan officers,
and the branch manager, and then try to get enough to support the loan officer.
We are good at what we do and fast. When we started our company we decided to be
a discount broker, do them fast, and build our goodwill by low cost loans, have
trust and referrals by our repeat customers, so we don't have to spend money to
find customer or use tricks to do loans.
Most common types of residential loans:
- 30 year loan
- 15 year loan
30 Year Loan
With a 30 year loan, your interest rate does not change, your payment does
not change, and you pay the loan off in 30 years.
Advantages
- Lower monthly payments than a 15 year loan
- Interest rate does not go up if interest rates go up
- Payment does not go up, it stays the same for 30 years
Disadvantages
- Pay a higher interest rate than a 15 year loan
- Interest rate stays the same if interest rates go down
15 Year Loan
With a 15 year loan, your interest rate does not change, your payment does
not change, and you pay the loan off in 15 years. This has been popular among
people who are refinancing their 30 year loan.
Advantages
- Lower interest rate than a 30 year loan
- Build up equity in your home faster than with a 30 year loan
- Interest rate does not go up if interest rates go up
- Payment does not go up, it stays the same for 15 years
Criteria when Applying for a loan:
-
Good Credit -
FICO Scores of 640 or higher. There are some exceptions.
- Two years of employment history in the same type of work or profession.
- Debt to Income
ratios of 40% or less. Here are some exceptions.
See our
Qualifying Worksheet
- Good
Collateral. Type of home you are buying. All lenders require the home
has to be functional.
There are many types of loan programs to qualify for.
- No money down home loan
- 3% down payment with no PMI
- No money down loan with seller concession up to six percent.
There are many different options when seeking a home loan. For example, if
you are willing to take a risk in order to have lower initial payments, you
might prefer an
adjustable rate mortgage to a fixed rate loan. |
