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Still looking for deals on Fixed rate mortgage ? Find our amazing Fixed rate mortgage offers at our top source site today where we have compared Fixed rate mortgage for you. ask.com About Fixed Rate MortgageA fixed rate mortgage (FRM) is a [mortgage loan] where the [interest rate] on the [Promissory note] remains the same through the term of the loan, as opposed to loans where the interest rate may adjust or "float." Other forms of mortgage loan include [interest only mortgage], [Graduated payment mortgage loan], [adjustable rate mortgage], [negative amortization], and [balloon payment mortgage]. Please note that each of the loan types above except for a straight adjustable rate mortgage can have a period of the loan for which a fixed rate may apply. A Balloon Payment mortgage, for example, can have a fixed rate for the term of the loan followed by the ending balloon payment. Terminology may differ from country to country: loans for which the rate is fixed for less than the life of the loan may be called hybrid adjustable rate mortgages (in the United States). This payment amount is independent of the additional costs on a home sometimes handled in [escrow], such as property taxes and property insurance. Consequently, payments made by the borrower may change over time with the changing escrow amount, but the payments handling the principal and interest on the loan will remain the same. Fixed rate mortgages are characterized by their [interest rate] (including [compound interest], amount of loan, and term of the mortgage). With these three values, the calculation of the monthly payment can then be done. Characteristics Index Unlike [adjustable rate mortgages], fixed rate mortgages are not tied to an index. Instead, the interest rate is set (or "fixed") in advance to an advertised rate, usually in increments of 1/4 or 1/8 percent. Terminology
Popularity Fixed rate mortgages are the most classic form of loan for home and product purchasing in the [United States]. The most common terms are 15-year and 30-year mortgages, but shorter terms are available, and 40-year and 50-year mortgages are now available (common in areas with high priced housing, where even a 30-year term leaves the mortgage amount out of reach of the average family). Outside the United States, fixed-rate mortgages are less popular, and in some countries, true fixed-rate mortgages are not available except for shorter-term loans. For example, in Canada the longest term for which a mortgage rate can be fixed is typically no more than ten years, while mortgage maturities are commonly 25 years. Pricing Fixed rate mortgages are usually more expensive than adjustable rate mortgages. Due to the inherent [interest rate risk], long-term fixed rate loans will tend to be at a higher interest rate than short-term loans. The difference in interest rates between short and long-term loans is known as the [yield curve], which generally slopes upward (longer terms are more expensive). The opposite circumstance is known as an [inverted yield curve] and is relatively infrequent. The fact that a fixed rate mortgage has a higher starting interest rate does not indicate that this is a worse form of borrowing compared to the adjustable rate mortgages. If interest rates rise, the ARM cost will be higher while the FRM will remain the same. In effect, the lender has agreed to take the [interest rate risk] on a fixed rate loan. Some studies have shown that the majority of borrowers with adjustable rate mortgages save money in the long term, but that some borrowers pay more. The price of potentially saving money, in other words, is balanced by the risk of potentially higher costs. In each case, a choice would need to be made based upon the loan term, the current interest rate, and the likelihood that the rate will increase or decrease during the life of the loan. Prepayment In the United States, fixed rate mortgages, like other types of mortgage, may offer the ability to prepay principal (or capital) early without penalty. Early payments of part of the principal will reduce the total cost of the loan (total interest paid), and will shorten the amount of time needed to pay off the loan. Early payoff of the entire loan amount through refinancing is sometimes done when interest rates drop significantly. Some mortgages may offer a lower interest rate in exchange for the borrower accepting a [prepayment penalty]. See also
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Information Reference: Wikipedia.org Fixed rate mortgageQuestions and AnswersFixed rate mortgage ending in January?Q) Hi, I was wondering if anyone could provide me with a bit of advice. My partner and I will have been in our first bought property for two years this coming january. Our fixed rate mortgage will be up then adn the rate is going to go substantially higher than we are paying right now. What is the best way to go about finding a better rate from another company and what does it all involve? Do we have to pay another company to take us on?Thanks in advance! Just like to add that we are in Scotland.A) I remortgage every 2 years to get a better fixed rate deal. If you go into your local mortgage advice company they will talk you through it. Try the estate agents Connells, as they have independant mortgage consultants in each of their offices. Each time I remortgage, it costs about £200 for the fees. Which works out a lot cheaper than the higher interest rates that I would have paid. That £200 just gets added to the mortgage.My fixed rate mortgage is about to expire! Help!?Q) I've had a fixed rate mortgage for the last two years and its about to expire at the end of March. What do i do next?! Will my current lender offer me a new deal or will it just change to the standard rate? If I switch will I get charged? Any good websites with advice?! Thanks!A) If you are in the UK approach your current lender and ask them if they can re-arrange your mortgage to a better product, if they can offer you one the charge should be minimal, if they can't shop around and source all lenders, even the internet have some good offers and the companies use in-house solicitors so fees are still kept low. Good luck.5 Year Fixed Rate Mortgage?Q) My son and his partner are first time buyers in the South East (UK) and have been offered a 5 year fixed rate mortgage borrowing £142K on a purchase price of £152K. The offer is with HSBC. Can anyone please advise if this is a good way to go as a first time buyer and is a high street bank a competitive source to borrow from? Also, pros and cons of a 5 Year Fixed Deal such as this? Thanks in advance! TJ ... 5 year fixed rate means the fixed rate of interest on the capital loan of £142K for the first five years ... the mortgage term will commence at 30 years. After five years the interest rate will resume to the normal variable rate.A) The type of mortgage taken depends on many factors like the intent of the buyers for the house. Are they planning to sell it or stay on it long term. Are they salaried people? Would their salary expected to go up from year to year to cover the expected rise of the mortgage payment once the 5 year term expires? If both of them have excellent credit rating, then shop around, don't take the loan officers word... they are paid on commission so they are not looking out for your son.I have discovered that I do not have the fixed rate mortgage I was sold - compenstion??Q) I stupidly signed on highlighted areas on mortgage forms that the adviser put before me, I was told I had bought a fixed rate mortgage. It turns out that I have a discounted mortgage, is it possible to get redress?A) Doubt it. You signed it and it was up to you to check. You could try and prove that you were misled, but I think that would be almost impossible as there is no evidence for it. The only evidence is your signature on a contract stating variable rate. Sorry mate!Any idea on how to get help paying a fixed rate mortgage?Q) ,my father in law had 2 stop working 4 a while when he hurt his thumb badly. now its better and he's trying 2 get a job but the only ones he can get are volentary work. now him and my mother in law are struggling 2 pay the mortgage. any idea's on any help to pay it they can get until he does get a paying job?A) I suggest you get off Yahoo Answers and go and find a job yourself.Any idea on how to get help paying a fixed rate mortgage?Q) ,my father in law had 2 stop working 4 a while when he hurt his thumb badly. now its better and he's trying 2 get a job but the only ones he can get are volentary work. now him and my mother in law are struggling 2 pay the mortgage. any idea's on any help to pay it they can get until he does get a paying job?A) I suggest you get off Yahoo Answers and go and find a job yourself.What is the best fixed rate mortgage for buying a flat in the UK?Q) And are UK resisdents able to use Euro or US mortgages for homes in the UK? If so, are they worth considering?A) There is no "best" fixed rate mortgage in the UK, as different products cater for different people. The best mortgage for one person may be the worst mortgage for someone else. In terms of fixed rate mortgages, it depends on how long you want the fix to last for - and whether you're happy to accept a high redemption penalty. You could take out a mortgage in a different currency, but you would be putting yourself at risk as your mortgage payments will fluctuate in response to the exchange rate. The only time you might consider taking a foreign mortgage is if you have a source of income in that currency which is sufficient to make the repayments.When your fixed rate mortgage ends...is it best to switch companies or stay?Q) Also do you have to get all the papers and valuations done again to be approved? little concerned as now work part time not full time. Just a little bit more info...I'm with Halifax in the uk. The fixed rate deal ends this Sept before changing to adjustable. Also to complicate matters further it is a joint mortgage with a friend. We are 23 & 24 years old and both single at the moment. She works full time. I'm now a full time student who works weekends.A) The best thing to do is keep your current mortgage for about 3 years and then refinance when the rates are lower. You don't have to stay withthe same mortgage company. Let them compete for your business and go with the best one for your situation and best rates.Whats the best 5yr fixed rate mortgage deal on the market?Q) with no extended redemption period after the 5 yrs and a low arrangement fee?A) Currently have a 6% fixed for 20 years, no Early redemption fee and 1 off payment £125 arrangement fee. Bradford & Bingley.should i get a fixed rate mortgage and if so for how long?A) It basically depends on your circumstances. If you are planning to move again in the near future, then you will need to ensure the mortgage is portable (i.e. can be transferred to another property). Check the redemption penalties, and avoid anything which has an extended tie-in (where you're locked into paying the standard variable rate for a period of time after the fixed/special deal has ended). As for whether you should get a fixed rate mortgage, it depends on your circumstances. A 25 year 100K repayment mortgage at 5.49% costs in the region of £610 per month. If interest rates went up by 2% then the same mortgage would cost approximately £733 per month - an increase of £123 per month. The question is: Could you afford the increased repayments in the event of an interest rate rise? If not, then no matter what fortune tellers tell you - GET A FIXED RATE MORTGAGE. In such a scenario, you cannot afford to gamble the roof over your head. If your mortgage is really tiny in relation to your income (e.g. interest rates would have to rise by 20% to cripple you), then you have more degree of choice. In which case, you would use your own "gut feeling" and look for the best deal there is in terms of monthly repayments - avoiding anything which has a penalty. If you go for a fix, then the length depends on the mortgage itself and your circumstances. If you are planning to move again soon, then you might opt for a shorter term fix, or pick a mortgage which is portable (i.e. can be transferred to a new property). You also need to take into account what your payrises are likely to be throughout the duration of a fixed rate. If you get little or no payrises, you'll want to fix for as long as possible.Where can I find today's rates for a fixed rate mortgage? I'm also looking to see past days for a trend.Q) I'm interested mostly in 15 and 20 year fixed mortgage rates for the current day and over the past several weeks. I'm looking for a direct link to a site with this information in a quantified format, without having to fill out any personal info and, in effect, apply for a new loan.A) There are so many sites that have this info. Try this one...lots of helpful loan information. http://loan.divinfo.com/Does lower prime rate effect fixed-rate mortgage rates?Q) How will the new lower prime rate effect (new) fixed rate mortgages? Will mortgage rates drop?A) the mortgage rates have already dropped....they're at 6% par with 1originatoin fee also the 2nd mortgage rates will go down as well as the credit cards, car loans, student loans, etcI am refinancing my 3 yr. arm mortgage & getting a fixed rate mortgage.?Q) I am refinancing to a fixed rate mortgage from a 3 yr. ARM. I have $16,825.37 in unpaid deferred interest. A mortgage broker told me this amount can be used either as an income tax deduction or to add to the principle of my new mortgage. I don't understand the concept of this at all. I would like someone to explain this better.A)I am refinancing my 3 yr. arm mortgage & getting a fixed rate mortgage.?Q) I am refinancing to a fixed rate mortgage from a 3 yr. ARM. I have $16,825.37 in unpaid deferred interest. A mortgage broker told me this amount can be used either as an income tax deduction or to add to the principle of my new mortgage. I don't understand the concept of this at all. I would like someone to explain this better.A) Sounds like you are in an "option ARM" and have not been paying enough to cover the interest each month. If you have the cash available to pay the deferred interest, you should do just that. If not, by rolling it into the new loan you are now paying interest on your interest which is not a good situation. But if you have no choice, at leat you're getting into a fixed rate loan. Hopefully it is a fully amortizing loan and not interest-only. Mortage interest is tax deductible and will be reported on a 1099 at the end of the year by your lender. However, since the interest you speak of is unpaid and added to the balance of your loan (which is basically an advance on your equity), I'm not sure it is reported as paid interest when you payoff the loan. Call the customer service department of your existing lender and ask if the $16,825 will be reported as interest at the end of the year and you will have your answer.Do you have an ARM or fixed rate mortgage?Q) And have you had an increase in your mortgage payments due to an ARM? If you are planning on purchasing a home in the future, would you prefer an ARM or a fixed rate?A) I would totally use fixed rate mortgage now. For two reasons: 1. Fixed rate mortgage has similar rate as ARM. I think there is only 0.25 to 0.5% difference after fee. 2. Rate for fixed rate mortgage is near all time low. Last year was 5.7%. Now is only 6.5%.What are the pros and cons of a fixed rate mortgage vs. an adjustable rate?Q) Being that it is a new year one of my resolutions was to do more research before a jumped into anything. Being that I'm new to the housing market what are the benefits of a fixed rate mortgage compared to an adjustable rate?A) A fixed rate mortgage is a mortgage in which the monthly principal and interest payments remain the same throughout the life of the loan. The most common mortgage terms are 30 and 15 years. With a 30-year fixed rate mortgage your monthly payments are lower than they would be on a 15 year fixed rate, but the 15 year loan allows you to repay your loan twice as fast and save more than half the total interest costs While an adjustable rate mortgage or ARM is a loan in which the interest rate is periodically adjusted, moving higher or lower in the same ratio as a pre-selected index such as Treasury bill rates. ARM loans may include caps on interest rate increases in a given time period, and over the life of the loan, and may include limits on the frequency of interest rate adjustments. ARM loans generally have initial below market interest rates in return for the borrower sharing the risk that interest rates may rise during the life of the loan.I just locked in a fixed mortgage rate at 6.125, is this good?Q) Im buying my first home and I locked in the rate today of 6.125 on a 30yr fixed mortgage, was this a good rate? I don't plan to sell it for a long time. It sounded good, but I don't know much about this type of thing.A) not a bad rate. consider buying the rate down if you dont plan to refinance and stay in the home for a long time this small amount you will pay wil save you a boat loan of money. pay 1.5% to buy the rate down. .75% it will give you a rate of 5.40 200,000 with the rate bought down to 5.40 200000X.0750=1500 per year 1500 X 30 years = $45,000 this is the added interest you save by buying the rate down and you well know interest is payed up front so the first 10 years you pay mostly interest. if you took what it is saving you 125.00 per month and sent an additional check of 125 marked apply to principle your mortgage would be paid off in 24 years and Date (#Months) Payment Towards Principal Towards Interest Remaining Amount Year 1 2007-09 (#001) $1,248.06 $348.06 $900.00 ($900.00) $199,651.94 Year 5 2011-09 (#049) $1,248.06 $431.77 $816.29 ($42,121.22) $180,966.28 Year 10 2016-09 (#109) $1,248.06 $565.26 $682.80 ($87,206.78) $151,168.24 Year 15 2021-09 (#169) $1,248.06 $740.02 $508.04 ($123,079.69) $112,157.55 Year 20 2026-09 (#229) $1,248.06 $968.81 $279.25 ($146,891.53) $61,085.79 Year 24 2030-09 (#277) $1,248.06 $1,201.82 $46.24 ($154,787.41) $9,074.79 2031-05 (#285) $511.58 $509.29 $2.29 ($154,960.62) $0.00We have a fixed rate mortgage...?Q) 20 years at 6%. Is there ANY possibility that our interest rate could go up depending on the economy? Any sneaky tricks the bank could have played on us? I'm getting paranoid with all these foreclosures. It's not an ARM, its fixed.A) In your closing package there is a 3 page document called The Note. Read it just in case. But I haven't seen any dirty tricks with fixed rate mortgages yet, and I don't think there is one in your case. 6% for a 20 year fixed loan sounds reasonable, so it should be all good. If it was 3% I would be worried.I have a fixed rate mortgage and after 3 years it becomes variable?Q) I've seen a tv show about a neighborhood that had financing with a fixed rate and then it changes to variable and they can't afford their house payment. Almost everyone in the neighborhood had their house taken away. We plan on refinancing when our 3 years is up (2 years left). Was there any reason why those people didn't refinance??? If there is I want to know what went wrong so we don't make the same mistakes.A) If your 'fixed rate' mortgage becomes variable after 3 years, you don't have a fixed rate mortgage, you likely have what is known as a 3/1 ARM or a hybrid ARM. Planning on refinancing, without having a backup plan, can result in the loss of your house. You should understand what your payment could increase to, and be prepared to pay that payment if you cannot refinance, or be prepared to sell the house before the payment increases. There are many reasons that they may not have been able to refinance, including some that you can do nothing about: - Interest rates may have increased, resulting in higher payments than they qualified for - They may have had a loss in income (lay-off, cutback in hours, etc.) since they purchased the house - They may have purchased the home using income from two spouses and since divorced, and the spouse left with the house may not have qualified on their own for financing - Their credit scores may have gotten worse (or been bad and stayed bad) - Values in their area may have decreased, so they were not able to borrow as much money as they owed - They may have had what are known as 'option' ARMs where they have the option of 4 different payments, and chosen to pay the minimum payment, which doesn't pay the mortgage company even as much as is owed in interest each month. If this occurs, the principal balance goes up each time, not down. By doing this every month, they end up owing more than the house is worth and cannot refinance for as much as is owed on the loan.Should I switch over from an ARM to a fixed rate mortgage?Q) Currently my ARM has rocketed to 7.3% and I have PMI to boot. At what point is it, or is it not, viable to switch to a fixed rate option somewhere in the 6% range. My refinance loan ammount would be approx 400K.A) When did the ARM portion expire? It is never good to let the ARM expire without locking in a fixed rate, the new rate is almost always higher than the initial rate, which is typically above the current rates for a 30 yr fixed, or even another similar ARM. How long ago did you get this loan? What percentage of equity do you have in your home (PMI falls off after 22% ownership, but you can request to have it removed after 20% owenership)? These are all questions your mortgage person should be asking you. I am a mortgage BANKER and am more than willing to help out if you have any questions. Feel free to email me for further guidance. Edit: JPN I am trying to reply to you but YAHOO says your email has not been confirmed, please email me at my office... jared@chicagobancorp.comSome content elements on this page provided by Yahoo |