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FIXED-RATE MORTGAGE
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Kal Duwage Mortgage Inc. fixed-rate loans have an interest rate that will not change over the life of the loan. One of the most common types of home mortgages available, you can choose a conventional loan, or a government-backed loan like the FHA, VA and USDA mortgage programs. You can also use them to buy a new home, or to refinance your current home.
Here’s why fixed-rate mortgages from Kal Duwage Mortgage Inc. are so popular:
- Your interest rate will never go up, even if the overall market rates go higher.
- Your monthly payments will never change, they stay predictable for the life of the loan.
- Very low monthly payments are available on long-term fixed-rate mortgages.
- The interest you pay on the loan is tax-deductible1, providing a welcome benefit at tax time.
- Many different down payment options and assistance programs are available.2
- Some programs have as little as 3% down and up to 100% financing.3
- You have long- and short-term options to choose from.
30-year and 15-year fixed-rate mortgages
Monthly mortgage payments includes a portion that is applied toward both principal and interest.4 Principal goes directly to pay off the loan, increasing the equity you have in your home. Interest is the cost of borrowing the money. As a general rule, at the beginning of a fixed-rate loan, a higher percentage of each monthly payment is applied toward interest, not principal. Over the course of the term, this will even out and reverse as a larger percentage of each payment goes toward principal. This is important to remember when deciding which fixed-rate mortgage will work best for you.
- 30-year fixed-rate mortgage: Considered a long-term mortgage, this offers some of the lowest monthly payments available since they’re spread out over a longer period of time. However, because you make more payments, you pay more interest over time. This is a great choice if you plan on staying in the home for a long period of time – at least seven to ten years. But even if that’s not your plan, the low monthly payments can still make this a smart choice. You just won’t build equity as fast.
- 15-year fixed-rate mortgage: This is considered a short-term mortgage. You can expect the monthly payments to be somewhat higher because they’re not spread out as long. But because the term is shorter, you pay a lot less toward interest and can save thousands over the life of the loan. For the same reasons, more of your monthly payments will go toward principal sooner, and your home’s equity will increase at a much faster rate. In essence, it costs less to borrow the money.