This "traditional" type of loan maintains its original interest rate throughout the entire life of the loan. Any change in monthly loan payments will be due to increases in other charges like insurance or taxes that will naturally occur over time. Fluctuations in market rates over the term of your loan won't have any impact on the amount of interest you pay because that rate is already "fixed." A Fixed Rate Mortgage loan may be a good choice if you:
- Want the security of knowing your interest rate will not change, nor will your monthly payment, unless property tax and insurance amounts change
- Plan to stay in this home for several years
- You don't expect your income to increase significantly in the coming years
Fixed rate Mortgage Loans come in various terms such as 10, 15, 20 or 30 years. In determining the length of your loan, you may want to consider:
- Total amount of interest you want to pay over the course of your loan
- For example, the total cost of a 30-year loan in terms of the interest paid on the loan is higher than the total cost of a 10, 15, or 20-year loan. With a 30-year loan, you have the advantage of lower monthly payments due to the longer loan term.
- With a 15-year loan, you have the advantage of repaying the loan more quickly with higher monthly loan payments.
- Your ability to make high monthly payments
- If you can afford to pay more per month, you reduce the number of months you have to pay. Also, choosing a 15-year term will save you thousands in interest charges vs. the typical 30-year term.
Another option to decrease the amount of interest you pay is to get a 30-year loan, so you don't lock yourself into higher monthly payments, but pay a little extra each month towards the principal when you are able to do so.
10 Year Fixed
| Best Choice If:You want a loan with fixed monthly payments, or you think that interest rates may rise | Advantages:Consistent monthly payments, save money with a shorter term and less total interest payments and market conditions do not create a risk of your interest rate increasing | Disadvantages:Your monthly payments will be larger than with a longer term mortgage |
10 Year Fixed Texas Cash Out
15 Year Fixed
| Best Choice If:You want a loan with fixed monthly payments, or you think that interest rates may rise | Advantages:Consistent monthly payments, save money with a shorter term and less total interest payments and market conditions do not create a risk of your interest rate increasing | Disadvantages:Your monthly payments will be larger than with a longer term mortgage |
15 Year Fixed Texas Cash Out
20 Year Fixed
| Best Choice If:You want a loan with fixed monthly payments, you plan on living in the home long-term, or you think that interest rates may rise | Advantages:Consistent monthly payments and market conditions do not create a risk of your interest rate increasing | Disadvantages:Higher interest rate than available for some other loan options and you will pay more interest charges over the life of the loan compared to shorter term loans |
20 Year Fixed Texas Cash Out
| Best Choice If:You want a loan with fixed monthly payments, you plan on living in the home long-term, or you think that interest rates may rise | Advantages:Consistent monthly payments and market conditions do not create a risk of your interest rate increasing | Disadvantages:Higher interest rate than available for some other loan options and you will pay more interest charges over the life of the loan compared to shorter term loans |
30 Year Fixed
| Best Choice If:You want a loan with fixed monthly payments, you plan on living in the home long-term, or you think that interest rates may rise | Advantages:Consistent monthly payments and market conditions do not create a risk of your interest rate increasing | Disadvantages:Higher interest rate than available for some other loan options and you will pay more interest charges over the life of the loan compared to shorter term loans |
30 Year Fixed Texas Cash Out
| Best Choice If:You want a loan with fixed monthly payments, you plan on living in the home long-term, or you think that interest rates may rise | Advantages:Consistent monthly payments and market conditions do not create a risk of your interest rate increasing | Disadvantages:Higher interest rate than available for some other loan options and you will pay more interest charges over the life of the loan compared to shorter term loans |
Home One 15 Year Fixed
| Best Choice If:You have minimal funds for a down payment and you want a loan with fixed monthly payments | Advantages:Only 3% down payment required
No income limits | Disadvantages:Higher interest rate and PMI rates than available for some other loan options |
Home One 20 Year Fixed
| Best Choice If:You have minimal funds for a down payment and you want a loan with fixed monthly payments | Advantages:Only 3% down payment required
No income limits | Disadvantages:Higher interest rate and PMI rates than available for some other loan options |
Home One 30 Year Fixed
| Best Choice If:You have minimal funds for a down payment and you want a loan with fixed monthly payments | Advantages:Only 3% down payment required
No income limits | Disadvantages:Higher interest rate and PMI rates than available for some other loan options |
Home Possible 15 Year Fixed
| Best Choice If:You have minimal funds for a down payment and you want a loan with fixed monthly payments | Advantages:Only 3% down payment required | Disadvantages:Higher interest rate than available for some other loan options |
Home Possible 20 Year Fixed
| Best Choice If:You have minimal funds for a down payment and you want a loan with fixed monthly payments | Advantages:Only 3% down payment required | Disadvantages:Higher interest rate than available for some other loan options |
Home Possible 30 Year Fixed
| Best Choice If:You have minimal funds for a down payment, you want a loan with fixed monthly payments and you plan on living in the home long-term | Advantages:Only 3% down payment required | Disadvantages:Higher interest rate than available for some other loan options |
Investment 15 Year Fixed
| Best Choice If:You want a loan with fixed monthly payments, or you think that interest rates may rise | Advantages:Consistent monthly payments, save money with a shorter term and less total interest payments and market conditions do not create a risk of your interest rate increasing | Disadvantages:Your monthly payments will be larger than with a longer term mortgage |
10 Year Fixed Land Loan (Over 40 Acres)
| Best Choice If:You want a loan with fixed monthly payments for the duration of the loan | Advantages:Consistent monthly payments, save money with a shorter term and less total interest payments and market conditions do not create a risk of your interest rate increasing | Disadvantages:Your monthly payments will be larger than with a longer term mortgage |
10 Year Fixed Lot Loan (40 Acres or Less)
| Best Choice If:You want a loan with fixed monthly payments for the duration of the loan | Advantages:Consistent monthly payments, save money with a shorter term and less total interest payments and market conditions do not create a risk of your interest rate increasing | Disadvantages:Your monthly payments will be larger than with a longer term mortgage |
FHA 15 Year Fixed
| Best Choice If:Flat monthly payments for the duration of the loan. | Advantages:Consistent monthly payments. | Disadvantages:Higher interest rate than available for some other loan options. |
FHA 20 Year Fixed
| Best Choice If:Flat monthly payments for the duration of the loan. | Advantages:Consistent monthly payments. | Disadvantages:Higher interest rate than available for some other loan options. |
FHA 30 Year Fixed
| Best Choice If:Flat monthly payments for the duration of the loan. | Advantages:Consistent monthly payments. | Disadvantages:Higher interest rate than available for some other loan options. |
