Fixed Rate Mortgages
If you know anything about loan programs, you know the fixed-rate mortgage is one of the most common types out there. This means that your monthly interest payments and principal charges remain the same throughout the duration of your loan.
Most fixed-rate mortgages can be paid off without any penalties over the period of 10 to 30 years, making it extremely stress and hassle-free for borrowers. These mortgages are structured to be paid off entirely by the time the loan term comes to an end.
Borrowers can opt for various monthly payment methods like "bi-weekly" mortgages to further ease their burden. This method calls for monthly payments made every two weeks.
Furthermore, if you do opt for a fixed-rate mortgage with an impound account, your monthly payments may vary from other borrowers. When it comes to monthly loan payments, some lenders and loan companies collect additional money from their clients, generally, those who pay less than 20% when buying their home.
This extra amount is then transferred into an impound account, making it easier for lenders to pay the property tax and insurance premium for their clients and borrowers, whenever they’re due.
If any changes occur in property taxes and insurance policies, the client’s monthly payment plans will be adjusted accordingly. Other than these minor changes and unexpected bumps, the overall payment plans for a fixed-rate mortgage are likely to remain the same.