A fixed-rate loan is a loan whose rate never changes over the life of the loan. Typically these rates are higher than ARMS initially since the terms do not change for the borrower. Fixed rate loans are ideal for borrowers that want to pay the same amount on the life of their loan. There are two types of fixed-rate loans: 15-year fixed loans and 30-year fixed loans. Contact a VIP loan officer at 800-680-8799 to see if a fixed-rate loan is right for you.
A 15-year fixed loan is a home loan you pay off over 15 years at the same fixed rate payment. Offering all of the perks of the 30-year loan, the 15-year loan offers a lower interest rate and the ability to own your house outright in half the time. The lower term and lower interest rate can save you tens of thousands of dollars in total loan payments, depending on the loan amount. One drawback with a 15-year loan is that you will have a higher monthly payment. If moving is a possibility for your family in the next five years, consider if a 15-year loan is right for you.
Many Americans today opt into a 30-year fixed mortgage – a home loan you pay off for 30 years at the same, fixed rate payment. A longer repayment period versus the 15-year loan means lower payments for borrowers, and the peace of mind knowing payments will never change. One drawback of a 30-year loan is it typically has a higher interest rate compared to the 15-year loan. This is ideal for those families planning on stay in their forever home for the long term.