The Fixed Rate Mortgage: Stability and Predictability in Home Financing
The traditional fixed rate mortgage stands as the most popular loan program, offering borrowers the security of unchanging monthly principal and interest payments throughout the loan's duration. These mortgages are available with terms ranging from 10 to 30 years and typically allow for penalty-free early repayment. The loan is structured, or "amortized," to ensure complete repayment by the end of the term.
While the core of a fixed rate mortgage remains stable, your monthly payment may fluctuate if you have an "impound account." This account, managed by the lender, covers more than just the monthly principal and interest:
1. Mortgage Insurance Premium: Required for borrowers who make a down payment of less than 20% when purchasing their home.
2. Property Taxes: A prorated monthly amount collected to cover annual property taxes.
3. Homeowners Insurance: A portion of your annual premium is collected monthly.
The lender uses the impound account to pay property taxes and homeowners insurance on the borrower's behalf when they become due. If either of these costs change, the monthly payment will be adjusted accordingly.
Despite potential adjustments due to impound account factors, fixed rate mortgages offer highly stable and predictable overall payments. This predictability makes them an attractive option for many homebuyers seeking long-term financial planning and peace of mind.
With hundreds of mortgage programs available, let us show you how we can save you $$$$ on your next mortgage! 
Company NMLS: 2366709
www.nmlsconsumeraccess.org
3001 Polar Lane, #502,
Austin, TX 78613
Phone: 512-299-4965
epaulson@gfmortgages.com
NMLS: 380212
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