Fixed Rate Mortgage Loans

Buying a house for the first time often means a lesson in finance and banking. When you are new to the process of borrowing money or applying for a loan, it might seem confusing or overwhelming. Working with experienced mortgage brokers in Las Vegas can help you to understand common financing options such as a fixed-rate mortgage loan.

Loan Terms

Fixed-rate mortgages are available in loan terms of 10, 15, 20, 25 or 30 years. The shorter your loan term, the more your monthly payment. However, a shorter loan term also means that you build equity faster and pay less in interest. For many people, the goal is to have the mortgage paid off by the time they expect to retire from paid employment.

Interest on the Loan

With a fixed-rate mortgage, the interest rate on your mortgage does not go up or down over the course of your loan’s term. If interest rates rise over the time that you have your loan, this works out in your favor. A fixed-rate loan also means that your monthly payments will be predictable. The only cause of a change in your payment would be a change in property tax or insurance rates. (Read on what you need to know about VA home loans here.)

Down Payment and Equity

With a fixed-rate mortgage, the lender requires that you make a down payment. The amount of the down payment required is typically 20 percent of the purchase price of the house. For example, if you are buying a $250,000 house, you will need to put $50,000 cash down and take out a mortgage for the remaining $200,000. The down payment is your equity. If you do not have the cash, you might be able to sell an existing house or take out private mortgage insurance.