Fixed

What are the advantages and disadvantages to having a fixed rate mortgage?

A 30 year fixed mortgage is the most popular mortgage in America. This is because it provides borrowers with the certainty of knowing that their mortgage payments (p & i) will stay the same for the duration of the loan.

Pros Cons
The payment (p & i) never increases. Borrowers do not pay less when rates improve without refinancing.
The rate stays the same. Borrower may pay a higher interest rate to have the rate fixed.

Borrowers often confuse the “fixed” element as a commitment that the entire mortgage payment will stay the same over the life of the loan. Since the taxes and insurance make up a portion of the escrow payment, and these charges will fluctuate over the life of the loan, ALL fixed rate mortgages are subject to some payment fluctuation.

In addition, many borrowers do not realize that they pay a premium (a higher interest rate) for the fixed rate mortgage. In the event that the borrowers select a fixed rate mortgage and do not stay the duration of the loan, they often pay more than they would have with an ARM (adjustable rate mortgage).

Unfortunately, few American homeowners keep mortgage 30 years. Hence, many borrowers pay the additional premium for a fixed rate mortgage that is never utilized. Nevertheless, when borrowers see a property as a long-term investment and they are concerned about payment affordability, the fixed rate mortgage may be a sound option.

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The FHA streamline refinance program helps borrowers lower mortgage payments. CBC National Bank specializes in FHA streamline refinancing transactions that lower interest rates and reduce mortgage payments without appraisals or income verification. FHA Streamline Refinances may be possible without increasing existing loan balances. No cost programs may result in a slightly higher interest rate. FHA Streamline Refinances may close in as few as 15 days, depending on date submitted. CBC National Bank specializes in VA Streamline Interest Rate Reductions with no income verification. VA Streamline Refinances may be possible without increasing existing loan balances. VA Streamline Refinances may close in as few as 10 days, depending on date submitted.

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Kwe Parker (NMLS#49165) is a professional mortgage specialist for CBC National Bank that specializes in showing FHA and VA borrowers how to use seldom publicized methods to lower FHA and VA mortgage rates without the normal hassles associated with refinancing. Kwe "Clay" Parker and his team have helped thousands of FHA and VA borrowers reduce their mortgage payments.