Fixed Rate Mortgage Quote

30 Year Fixed Rate Mortgage - A mortgage in which the interest rate remains the same for the life of the loan. Payments are amortized for 30 years. In other words, payment is calculated in such a way that the borrower makes equal monthly payments and pays off the home loan in 30 years.

A hybrid of sorts to the standard thirty year fixed, is the thirty year fixed, with an Interest Only payment option. For the first ten years of this loan, the borrower has the option to make an interest only option, which offers a lower monthly payment. The interest rate on this loan does not change for the entire thirty years term.

If you plan on staying in your home for the rest of your life, a 30 year mortgage may be your best option. While the monthly payment may not be as low as with an ARM, you have the security of knowing you will never have to refinance and worry about being stuck with a higher monthly payment down the road.

With rising interest rates looming in the horizon, many home buyers are now seeking the payment stability the 30 Years Fixed Rate Mortgages (FRM) offer. The 30-Year Fixed has again become a popularly demanded loan.

The 30 year fixed rate mortgage is probably still the most popular mortgage option. When deciding between mortgage programs, you need to consider different variables such as the length of time you will be in the home. Sometimes you may be better off with an adjustable rate mortgage (ARM), if you only see yourself being in the home for a few years.

A 30 year mortgage is the most common because many people can not afford to go to a lower term. Also, a 30 year mortgage comes highly recommended for the tax benefits it provides along with a low monthly payment. Remember, it is always better to have the cheaper monthly payment that you can afford that gives you a little flexibility each month, and then you can always pay extra when it is convenient so you can pay your loan off quicker.

While the most popular mortgage, before going with a 30 year fixed, consider how long you plan to be in the home. If not more than 5 years or so, take a look at what rates you can get on a 5/1 ARM and compare the two.

In the investment world, the longer the capital is committed for, the higher the return. This is true with corporate bonds, T-bills, bank certificates of deposit, etc. This is also true with mortgage loans. Although the 30 Year Fixed Rate Mortgage have payments lower than that of the 15 Year Fixed, the 30 Years Fixed interest rates are often one half percent higher than that of 15-Year Fixed Rate Mortgages.

While most borrowers feel that a thirty year fixed mortgage is the best option, it is not always the case. The average homeowner lives in their home for 5-7 years and may be better off with a mortgage that is fixed for 5 to 7 years and adjustable afterward. This gives the stability of a fixed rate mortgage with the lower rates that are available with an ARM.

5 Year Fixed Rate Hybrid Mortgage - A mortgage program in which the interest rate remains the same for the initial 5 years. At the end of the fifth year, the mortgage turns into an Adjustable Rate Mortgage for the remainder of the loan term. Payments of most 5-Year Fixed Rate Hybrids are amortized for 30 years.

This loan program is named "5/1 Hybrid" because it starts out as a Fixed Rate Mortgage (FRM), then changes to an Adjustable Rate Mortgage (ARM). For this reason, it is also commonly refered to as the "5/1 ARM".

This is also called a 5/1 ARM meaning that the rat is fixed for the first 5 years and adjusts 1 a year every year after that.

When the adjustment period begins there is a cap for how much the rate can adjust in the first year, and each year after that. These loans also have a cap for the life of the loan as well as a floor rate, which is the lowest rate the loan could ever have.

The hybrid or ARM loans are a great option to save money on your monthly payment especially when used in the right situations. If you plan on moving within the next 5 years, there is no reason to obtain a higher rate mortgage that is fixed for the life of the loan instead of a 5 year fixed rate loan.

In most cases, mortgage rates are higher when the "fixed" period is longer. In other words, a 30-Year Fixed Rate mortgage usually carries an interest rate higher than a 5-Year Fixed Hybrid (5/1 ARM). For home buyers who do not intend to keep their mortgages for more than 5 years, a 5/1 ARM is usually a smarter choice because of its lower initial interest rate.

If you think you may need a ARM with a longer fixed term ask your mortgage broker about a 7 or 10 year ARM. The rates may not be as good as a 5 year ARM but they are still lower then a fixed rate loan.

For the past ten to fifteen years, this has been one of the most popular loan programs on the market. The reason for this is simple. The average mortgage loan in the United States is kept less than five years. In these days of frequent refinancing and frequent moving from one home to another this loan will make much more sense than a long term fixed program such as a thirty year fixed. With this program borrowers can save thousands of dollars in interest over the five year period when compared to the traditional thirty year fixed.

7 Year Fixed Rate Hybrid Mortgage - Sometimes referred to as the "7/1", the 7-Year Fixed Rate Loan is a mortgage where the interest rate is fixed for 7 years. After the 7-year fixed period, the interest rate adjusts, usually once a year, for the rest of the loan term. Most 7 Years Fixed Hybrids are amortized for 30 years. That is, payments are calculated so the home loan is paid off in 30 years.

Under normal interest rate climate, the interest rate of a 7-year fixed rate hybrid is usually lower than that of a 30-year fixed rate mortgage. The "7/1 ARM" is designed for homeowners who do not intend to keep their mortgages for more than seven years to take advantage of the lower interest rates during the initial seven years.

In additon to 7/1 ARMS, there are also hybrid ARMS with different fixed terms, including 3/1 and 5/1.

The interest rate offered for this type of ARM is usually lower with a shorter fixed term. So a 7/1 ARM will have a higher interest rate than a 3/1 ARM.

Statistics have shown that Americans keep their home loans on average for less than 7 years. For younger homeowners who plan to "trade up" their homes. A Hybrid mortgage with a 7-year Fixed Rate period, which usually have a lower initial interest rate than the 15-year Fixed and the 30-year Fixed, may be a better loan option.

Sometimes the rate differences between these hybrid type mortgages and fixed rate mortgage are so minimal that it may make more sense to obtain a fixed rate mortgage. So make sure that you ask about what all of your rate and program options are up front.