30 Year Fixed Mortgage
The thirty year fixed mortgage is the basic loan structure upon which just about every other residential mortgage program is based upon. It is defined by having a term that lasts for 30 years, and the rate and payment are fixed for the duration of this loan term. You can get:
- 30 year fixed rate terms for Conforming mortgages
- 30 year fixed rate terms for VA mortgages
- 30 year fixed rate terms for FHA mortgages
- 30 year fixed rate terms for USDA mortgages
Most people feel comfortable with this loan structure because it eliminates any uncertainty about their future personal finances, and cash flow with a payment that will NEVER change. However, if you are fairly certain about your future plans, and feel there is a good chance that you will sell the house or refinance sometime in the next 5 or 7 years, tens of thousands of dollars can often be saved by obtaining an Adjustable rate mortgage with an introductory fixed rate for 5 or 7 years. These “intro” rates are almost always lower than a fixed rate which is where the savings occurs. People are wary of these loans generally because after the intro fixed period the rate can fluctuate up or down.
There is no right or wrong way to go with the Fixed vs. ARM question. It is a matter of your personal comfort level, and the 30 year fixed is certainly far more common.
