Fixed Mortgage Rate

Fixed rate mortgage is one of the most common mortgages that are taken by people who want to become home owners and who do not want to gamble. People find a home that they like in a neighborhood that suits them and feel that they have found their dream home so they take a fixed rate mortgage for it. Although fixed rate mortgage interest rates may be higher then the interest rates of other types of mortgages but why most people prefer them is that they don’t have to worry about interest rates changing and they know exactly how much money they need to put aside for the mortgage installment payments. 30 year fixed rate mortgage is one of the most popular mortgages that are taken. Once one has shopped around with banks, credit unions, mortgage companies and decided which of them is giving them the best terms they will take out a fixed rate mortgage. As the interest rate is fixed for the entire term of a mortgage and most fixed rate mortgages are long terms mortgages varying between 15 and 30 years one can use a fixed rate mortgage calculator to know exactly what one is going to be paying.

In a fixed rate mortgage there is no penalty applied in USA if one pays the principal earlier then the term of the mortgage. A fixed rate mortgage excludes any other payments that one may be required to pay on the property like taxes, etc. To qualify for a fixed rate mortgage one needs to have a good credit score and a steady income.

This does not mean that those who have low credit scores cannot get a fixed rate mortgage they can but for them the loan to value ratio may be reduced and the interest may be higher. For example a person who has a credit score of 640 may get 90% loan to value (LTV) and some mortgage companies even offer 100%. However credit scores below 600 will not get the same percentage of LTV and will have to put up more money as down payment. The mortgage companies do this because they feel that people with lower credit scores pose a higher risk. The reason for a fixed rate mortgage being higher is because the term is longer then that of any other type of mortgage and no one can predict with 100% accuracy what will be the conditions after 15 years or 30 years so the mortgage companies try to minimize the risk on the loan. One may also get a fixed rate second mortgage however the interest rate for the second mortgage will be higher as the first mortgage is the prime mortgage and in case anything goes wrong the first mortgage will get paid off first before the second mortgage. The US government agency Freddie Mac and Fannie Mae publish 30 year fixed mortgage rates and 15 year fixed mortgage rates and the average annual rates and points. All this information is available on the internet and the 30 year mortgage rate as on 13th September 2007 is 6.31% and on 15 years is 5.97% now these are the average rates that are compiled and published weekly by Freddie Mac. Fixed mortgage interest rates do not vary too much during a long period of time and even when they do they generally tend to stabilize very quickly. However they do vary between mortgage brokers because the loan officer or mortgage broker will add their margin and then offer a rate.

One can use the internet to find out ‘30 year fixed rate mortgages in Florida’ or best fixed rate mortgage UK. All the information that one needs to know about fixed rate mortgages or cash back fixed mortgage rate, etc are all available.