30-YEAR FIXED-RATE MORTGAGE

WHAT IS A 30-YEAR FIXED-RATE MORTGAGE?

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A conventional 30-year fixed-rate mortgage features a steady interest rate throughout its lifetime. Spanning three decades, homeowners with this mortgage can look forward to consistent monthly payments for many years to come, which can provide peace of mind and help them budget their finances. A conforming 30-year fixed-rate loan offers amounts up to $510,400 in most of the US and a maximum of $679,650 in high-cost areas. To decide if a 30-year fixed mortgage is right for you, ask yourself these four questions:

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• How long are you planning to stay in your home?

  • If you are considering a 30-year fixed-rate mortgage, you should be planning to stay put for the long haul. We recommend a minimum of 5-10 years in your new home.

• Would you prefer consistent monthly mortgage payments?

  • Like the sun rising in the east, the terms of a 30-year fixed-rate mortgage never change. A consistent interest rate throughout the lifespan of your loan keeps your monthly mortgage payments the same for 360 months. Kiss those fluctuating mortgage payments goodbye!

• Would you prefer a low mortgage payment?

  • Due to the long-term nature of this loan, a 30-year fixed-rate mortgage makes your monthly mortgage payments more affordable than a fixed-rate mortgage with a shorter time frame. You end up paying more interest over three decades, but the principal repayment is spread over that same period of time. Lower monthly mortgage bills mean you can afford more house!

• Are you purchasing or refinancing?

  • Looking to buy a new home? This mortgage option is tailor-made for you. Looking to refinance your home at a lower rate? A 30-year loan may be too long. Consider a shorter fixed term mortgage or an adjustable-rate mortgage based on your budget and refinancing goals.

CONVENTIONAL 30-YEAR FIXED-RATE MORTGAGE FEATURES INCLUDE:

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• 3-5% minimum down payment options for qualified homebuyers.

• Regular, qualified income required.

• No private mortgage insurance (PMI) with 20% or more down.

• HomeStyle® renovation loans with as little as 5% down.*

• Seller assistance with up to 3% of closing costs.

• Loans up to $5 million for non-conforming mortgages.

• 203k renovation loans with a minimum 620 middle FICO score.
  *HomeStyle® is a registered trademark of Fannie Mae.

DID YOU KNOW?

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As with most amortized loans, the initial payments of your 30-year fixed-rate mortgage are primarily devoted to paying interest. As the years roll by, this will gradually shift and you’ll reach a point where your monthly payments cover more principal than interest.

What does this mean? As you embark on your 30-year fixed-rate mortgage, your first couple of years of mortgage payments won’t make much of a dent in your loan’s principal balance. Once you pay off most of the interest, the latter years of your mortgage will be devoted to your principal and you’ll see your mortgage balance decrease dramatically.

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