The traditional fixed rate mortgage is the most common type of loan program, where monthly principal and interest payments never change during the life of the loan. Fixed rate mortgages are available in terms ranging from 10 to 30 years and in most cases can be paid off at any time without penalty. This type of mortgage is structured, or "amortized" so that it will be completely paid off by the end of the loan term.
Even though you have a fixed rate mortgage, your monthly payment may vary if you have an "impound account". In addition to the monthly "principal + interest" and any mortgage insurance premium (amount charged to homebuyers who put less than 20% cash down when purchasing their home), some lenders collect additional money each month for the prorated monthly cost of property taxes and homeowners insurance. The extra money is put in an impound account by the lender who uses it to pay the borrowers' property taxes and homeowners insurance premium when they are due. If either the property tax or the insurance happens to change, the borrower's monthly payment will be adjusted accordingly. However, the overall payments in a fixed rate mortgage are very stable and predictable.
We've been helping customers achieve ownership and afford the real estate of their dreams since 1990 and we love what we do.
Company NMLS: 1942
Individual NMLS: 303544
CA DRE: 00987187
UAMCO DRE: 01154 798
www.nmlsconsumeraccess.org
5511 Mission Street
San Francisco, CA 94112
Phone: (415) 260-9376
smhloans007@gmail.com
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