Fixed Mortgage Rates 101
When you get into a home loan situation this can seem like a huge commitment to some. If you have been renting an apartment or condominium for a long time, taking on a 30-year mortgage for a new home can seem daunting. However there are costs and benefits to a mortgage with a fixed rate and these are things that you should be aware of before you enter into an agreement.
Costs & Benefits of Fixed Mortgage Rates
- Costs: When you are going in for a lengthy fixed rate mortgage the costs are going to be clear. You are going to have to pay this same amount each month for the whole length of time of the loan. Some people can’t imagine staying somewhere much more than 30 days let alone 30 years.
- Benefits: The benefits of a longer fixed mortgage rate are actually quite a lot. A longer mortgage with fixed interest rates benefits from the laws of inflation. Presumably in 30 years from today you will be making more money than you are now. So that fixed rate mortgage means you are paying the same amount (or even less if you refinance), which should work to your advantage. Also you get tax deductions on your mortgage interest. If you don’t know about that yet you should speak to your real estate professional.
If you are going back and forth when it comes to making a bigger down payment, shortening up your home loan, or going in the other direction and totally maxing this time period out, you are not alone.
Many people don’t totally understand all the benefits to a lengthy mortgage; for some, a lengthy mortgage doesn’t make sense. If you have questions and you don’t know where to turn, reach out to one of our reps here at Paramount Equity. We will go over your individual situation and help you understand what will work best for you.
The Paramount Pledge™ – Triple Protection
The Paramount Pledge. It is our promise to you that we’ll provide the best rates, won’t charge you an application fee to lock in a rate and will ensure we can close and lock in a rate at the terms we provide.
No Application Fee – Other lenders charge hundreds of dollars to start the loan process with you. Paramount Equity Mortgage® will never ask you to pay an application fee just to lock in your rate.
Better Rate Warranty – After you complete a loan with us, we will cover most of the cost to refinance or purchase within the next seven years, for any reason.
Set & Secure Closing Guarantee™* – Once we receive all required borrower information, your signed disclosure and lock your loan, we guarantee we can close your loan at the rate and terms we provided. If we can’t, we will pay you $500.
* The Set & Secure Closing Guarantee is not valid in the event that there is an unforeseen change such as, an appraisal coming in under value, undisclosed debt at the time the loan was pre-qualified, a change in income due to loss of job or change in employment, etc. This guarantee is also not valid in the event that you withdraw your application or request a change to the terms of your loan. A change in terms would consist of, but is not limited to, a change in loan amount, fixed vs. adjustable rate, number of years the loan is amortized, adding/removing a borrower, etc.
On a purchase transaction with a Conventional 30 year fixed loan, a payment of $1066.23 with an LTV of 70%, and a 4.210% % APR. For all information a loan amount of $220,000 is assumed and a rate of 4.125% is being used. Terms available to qualified applicants only; payment does not include taxes or insurance which, if applicable, will increase your total monthly payment. Rates are subject to change without notice. Mortgage insurance is required for all FHA loans and conforming loans with a Loan To Value ratio above 80%. Mortgage insurance is not included in the payment quoted which, if required on your loan, will increase your actual payment. The APR (4.210%) shown has been calculated assuming a 740 credit score. Additional costs to obtain this loan include but are not limited to: payment for taxes and insurance due, payment for an appraisal, any amount necessary to establish your escrow account, if applicable, and title fees.