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Fixed Rate
Mortgages
The most common type
of mortgage program where your monthly payments for interest and
principal never change. Property taxes and homeowners insurance
may increase, but generally your monthly payments will be very
stable.
Fixed-rate mortgages
are available for 30 years, 20 years, 15 years and even 10 years.
There are also "bi-weekly" mortgages, which shorten the loan by
calling for half the monthly payment every two weeks. (Since there
are 52 weeks in a year, you make 26 payments, or 13 "months"
worth, every year.)
Fixed rate fully
amortizing loans have two distinct features. First, the interest
rate remains fixed for the life of the loan. Secondly, the
payments remain level for the life of the loan and are structured
to repay the loan at the end of the loan term. The most common
fixed rate loans are 15 year and 30 year mortgages.
During the early
amortization period, a large percentage of the monthly payment is
used for paying the interest . As the loan is paid down, more of
the monthly payment is applied to principal . A typical 30 year
fixed rate mortgage takes 22.5 years of level payments to pay half
of the original loan amount.
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Dependable
