Conventional Fixed Rate LoansUnderstanding Home Loan & Mortgage Fixed Rate Loans
Fixed Rate Loans
Looking for your mortgage payment to be the same every month? Then a fixed rate loan, may be right for you. A fixed-rate mortgage loan provides you with the security of having the same interest rate over the life of the loan
Fixed rate loans come in a variety of loan terms, including 15, 20, and 30 year terms. The monthly principal and interest payments will be predictable, which makes it easy to budget every month. May be a good choice if you plan to stay in your home for a long time.
Feel at ease from rising interest rates for the life of the loan, no matter how high interest rates go.
What is a conventional fixed-rate mortgage?
Monthly principal and interest payments on a conventional fixed-rate mortgage remain the same for the life of the loan making it an attractive option for borrowers who plan to stay in their home for several years. The alternative to the fixed-rate mortgage is the adjustable-rate mortgage (ARM), which features lower monthly principle and interest payments during the first few years. While many prefer the security of a fixed-rate loan, an ARM may be a better option – especially if you know you’ll be moving within the next several years.
30-year fixed rate mortgages
15- and 20-year fixed-rate mortgages
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Fixed Rate Benefits and Considerations
No interest rate surprises
The best fixed rate
Fewer hoops to jump through
Refinancing options available
Fixed Rate Requirements and Qualifications
- The loan amount for a conforming mortgage is generally limited to $424,100 for a single-family home, though limits may be higher in regions where home prices are higher. Jumbo loans allow you to exceed the conforming loan limit to borrow for a higher-priced home.
- Most conventional loans will require at least 5 percent (and optimally 20 percent or more) as a down payment. For loans with lower down-payment requirements, explore government-backed mortgages like VA loans and FHA loans or speak to your Mortgage Loan officer about other options that may be available.
- Conventional loans are a good choice for borrowers with very good credit, which generally means a FICO score of 740 or higher. There are also established guidelines for income and other personal financial information.