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Fixed Rate Mortgage, Conventional Mortgage, 30 year Fixed
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 30 year fixed rate mortgages are the most common type of home loan mortgage program in the U.S. Homeowners love them since the monthly payment for interest and principal never change. Property taxes and homeowners insurance may increase, but generally your monthly payments will be very stable for the entire time you have the loan.
Fixed rate mortgages are available for up to 50 years in some cases with the most common being 30 years, 20 years, 15 years and even 10 years. There are also "bi-weekly" mortgages. Bi-weekly mortgages are paid every two weeks, which shorten the loan payback period to around 23 years instead of 30.
Get more information on how bi-weekly payment plans work.
The Fixed Rate Home Mortgage Has Two Important Features
- First, the interest rate remains fixed for the life of the loan versus an adjustable rate mortgage where the interest rate changes over time.
- Second, payments remain the same for the entire term of the fixed rate loan and are structured so that the mortgage is paid in full at the end of the term.
Paying Down Your Mortgage - What You Need To Know
During the early part of paying back any mortgage a large percentage of the monthly payment is used for paying the interest while very little of your payment goes to paying principal. As you pay your mortgage each month over time more of the monthly payment is applied to principal. For example, the typical 30 year fixed rate mortgage takes 22.5 years of the same payments to pay half of the original loan amount.
Article by Dale Stouffer, Mortgage Broker. Dale has been a mortgage broker since 1996. This Article is designed to be of general interest and should not be considered accounting, legal, or tax advice. The specific information discussed may not apply to you. Before acting on any matter contained herein, you should consult with your personal attorney, tax adviser, or accountant.
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