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30-Year Fixed Rate Mortgage

What is a 30-year fixed rate mortgage loan?

A 30-year fixed mortgage is a loan with an interest rate that does not change for the life of the loan. For example, on a $300,000 loan with a fixed interest rate of 5.00%, on a 30-year mortgage, the monthly payments will be $1,610.46. So, as long as you have that loan, the interest rate of 5.00% and payment stays the same. Borrowers are fortunate nowadays as the average rates are in the 3.50% range per the chart below.

30 year fixed rates historical chart

Which type of borrower should choose a fixed loan?

Borrowers who want a non-fluctuating set amount deducted from their monthly income are best prepared for 30-year fixed mortgages. These are who don't like surprises when it comes to monthy bills. Typically, if you plan to stay in the home for over 5 to 7 years, it's a great plan as you don't have to worry about the ups and downs of the financial markets.

What are the pros and cons of getting a 30-year fixed-rate loan?

The advantages of a 30-year fixed-rate are:
1.) it's a set payment every month;
2.) the rate is not linked to the bank indexes, so it won't make any surprising fluctuations up or down which is perect for first time homebuyers; offers protection from inflation which is great security;
3.) borrowers can refinance if interest rates fall substantially.

The disadvantages of a 30-year fixed rate loan:
1.) rates and payments are generally higher than adjustable rate mortgages (ARMs), however, if interest rates go up in the future, the fixed rate loan will become less;
2.) you may qualify for less home than you would with an ARM;
3.) borrowers may end up paying more interest vs. an ARM, if they choose to sell their home in 5-to-7 years

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1st Nationwide Mortgage Corporation
65 Enterprise
Aliso Viejo, CA 92656
(949) 207-3399

An Equal Housing Lender -   NMLS #1281

© 2005 1st Nationwide Mortgage Corporation. Trade/service marks are the property of 1st Nationwide Mortgage and/or it's subsidiaries. All rights reserved. * 1st Nationwide Mortgage offers these products through our family of companies. Purchase loans and Refinance loans are available for Jumbo mortgages , 30 year fixed, 15 year fixed, FHA loans, VA loans, HARP loans and Reverse Mortgages. *All of the scenarios listed above are subject to various credit debt to income ratio requirements that are subject to change without notice. This is not an offer for extension of credit or a commitment to lend. Loans subject to approval. Rates and programs subject to change without notice. These materials are not from HUD or FHA and were not approved by HUD or a government agency. This is not an offer to enter into a rate lock agreement under CA law, or any other applicable law. CA Loans made or arranged pursuant to California Finance Lender Law License 603K287 and CA Bureau of Real Estate, Real Estate Broker - Broker#01517084, (213)620-2072, California Department of Corporations, Alaska #AK1281, Colorado Mortgage Company Registration, Florida MLD1423, Texas SML #1437886, Oregon Mortgage Lending License ML-5326, Virginia #MC-6675, Washington Consumer Loan Company CL-1281 NMLS Consumer Access.

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