The 30 year fixed rate mortgage is a classic option. In fact, it’s the mortgage that most people are referring to when they mention a home mortgage. Want more details? Wondering if this mortgage is right for you? Here’s what you need to know.
Benefits of the 30 Year Fixed Rate Mortgage
The 30 year fixed rate mortgage offers predictability. These loans are set up so that you pay off your home over a 30-year time frame, and as an added bonus, they are structured so that the loan payment stays the same for the life of the loan. That makes it easy to budget for the future.
Who Should Get a 30 Year Fixed Rate Mortgage?
If you want predictability, a 30 year fixed rate mortgage is probably perfect for you. Beyond that, these mortgages are best for people who plan to stay in their homes for at least five years. You can also use a 30 year fixed rate mortgage to tap into your equity, and you can borrow up to 97% of your home’s equity with some of these mortgages.
Types of 30 Year Fixed Rate Mortgages
If you want a low down payment and generous terms, you should look at FHA or VA loans. Generally, these loans are 30 year fixed rate mortgages. However, as they are guaranteed by the Federal Housing Authority or Department of Veterans Affairs, they tend to be easier to obtain.
If you take out a conventional 30 year fixed rate mortgage from a bank, you typically need to pay a slightly larger down payment than you do if you go through one of these programs, but the other benefits remain the same.
When You Should Consider Alternatives to the 30 Year Fixed Rate Mortgage
If you only plan to stay in your home for a year or two, you may want to opt for an adjustable rate, rather than a fixed rate mortgage. Adjustable rate mortgages tend to start off with a lower rate than their fixed rate counterparts. Then, as long as you sell the home before the rate adjusts, you don’t have to worry about facing a potentially higher interest rate.
Similarly, if you want to pay off your home faster, you may want to opt for a 15 year fixed rate mortgage. That said, if you don’t want to be locked into those large payments, you may just want to take out a 30 year fixed rate mortgage and make a double payment every month.
Applying for a 30 Year Fixed Rate Mortgage
At BrightPath, we can help you obtain a conventional 30 year fixed rate mortgage as well as FHA and VA loans. To learn more, contact us today. Or, start the application process online.
When you work with us, you can handle the entire process online, and you can easily track the status of your application so that you instantly know when you’re approved. Not sure if you want this type of mortgage? Contact one of our agents and we can help you decide which option is right for you.