A 30-Year Fixed Rate Mortgage is just what it sounds like - a home loan that offers a fixed interest rate, one that will not change over the life of the loan. A homeowner is given 30 years to pay back the money borrowed with associated interest.
Benefits of A 30-Year Fixed Rate Mortgage
There are many reasons a 30-Year Fixed Rate Mortgage is the right choice for many homeowners. Here at Residential Home Mortgage Corporation, we’ve identified three key benefits on why this program might be right for you:
Lower Payment - A 30-Year Fixed Rate is typically the longest repayment term offered. Extending the term to 30 years, provides a homeowner a lower monthly payment as the time period to repay the mortgage is stretched beyond standard 10, 15 and 20 year repayment terms.
Peace of Mind - The 30-Year Fixed Rate Mortgage loan provides a stable rate and payment over the life of the loan. Unlike an Adjustable Rate Mortgage (ARM), where the interest rate can adjust or change, the rate you lock in today is the rate you’ll pay for the next 30 years. Knowing the interest rate and payment will remain constant allows buyers the peace of mind to budget accordingly.
Stretch your Dollar - You work hard for your money; we understand you want to see it work hard for you. Choosing a 30-Year Fixed Rate Mortgage allows you to stretch your borrowing dollar a bit further. This program allows you to borrow a bit more money, while keeping the payment at a number you are comfortable with, than if you were to shorten the repayment period to 20 or 15 years. For example, borrowing $300,000 over 30 years will be a lower monthly payment than if you borrowed $225,000 over 15 years.
30-Year Fixed Rate Mortgage Considerations
As you venture through the home finance process, there are several things to consider. For instance, the interest rate of a 30-Year mortgage will be slightly higher than mortgage loans with shorter terms, because you are charged a slightly higher rate since you will be using the money longer. The upside is a lower payment. These are a few of the things to consider when choosing the right mortgage for you. Don’t worry, at RHMC, we’re here to guide you through every step of the mortgage process with expert advice and service.
Interest and Equity
As with all new experiences, there is always new terminology to learn. Here at RHMC, we’re here to help with some of the most common terms a homeowner will hear during the mortgage process.
EQUITY: A common term used in the loan process is equity. What is equity? Equity is the difference between what you owe on your mortgage and what your home is currently worth. As you pay down your loan or your home value increases, your equity in your home will increase.
INTEREST: Another common term used throughout the finance process is interest. What is interest? Interest is the amount of money, in excess of the amount you borrowed, you’ll pay on your loan. With a 30-Year Fixed Rate loan, a buyer will pay more interest and build equity at a slower pace than with a shorter-term loan. This is a small tradeoff for the lower monthly payment and longer term.
What Are Today’s 30-Year Fixed Mortgage Rates?
Mortgage rates change all the time. Rates are affected by several factors, including, but not limited to, market conditions, credit scores, equity, home type, and transaction type. Since you are borrowing money for 30 years, it is important to have the lowest rate possible.
At RHMC, we’ve built our reputation on providing the best rates on a daily basis. We have found that combining those great rates with outstanding customer service and expertise is a winning combination.
Ready to Mortgage Smartly™?
Fill out a low rate quote request today to discuss your 30-Year Fixed Rate Mortgage loan with one of our RHMC loan specialists.