Fixed Rates Explained
A mortgage that has been around for a long time is the fixed rate mortgage. Your grandparents most likely had their first mortgage fixed, if they were homeowners. The definition of a fixed rate mortgage is when the interest rate and periodic payment remain constant during the period of the loan. The terms of these mortgages generally range from 10 to 30 years. Your monthly payment will be lower if you go for a longer term. The downfall, however, is that the longer the loan term, the more interest will accrue during its’ lifetime. While most of these loans are paid off in monthly payments, alternatively you can pay in bi-weekly (one payment every two weeks) installments.
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