If you’re interested in a fixed-rate loan, find out more about what they are and their primary benefits below.
What Are Fixed-Rate Loans?
Fixed-Rate Loans are traditional loans that conform to and fall under Fannie Mae (FNMA) and Freddie Mac (FHLMC) guidelines. A fixed-rate mortgage will charge a homeowner a pre-defined rate of interest over the course of the loan. Since the loan is fixed, the interest rate won’t change throughout the loan’s terms. Keep in mind that the loan’s interest and principal payments will alter from month to month, but the total payment will stay fixed.
You can use BayCoast Mortgage’s fixed-rate loans for a primary residence, secondary home, or investment property with 1-4 units. These loans are also traditionally over a 30-year term.
How Are Fixed-Rate Loans Different from Adjustable-Rate Loans?
When you’re looking for a mortgage loan, you’ll often have the choice between adjustable-rate loans and fixed-rate loans. The major difference between these two types of loans is that the interest rate of an adjustable-rate mortgage can change over the life of the loan, while the interest rate of fixed-rate mortgages will not.
What Are the Benefits of Fixed-Rate Loans?
Fixed-rate loans come with a couple of advantages that make them attractive to many homeowners. Learn more about the two main fixed-rate loan benefits below:
- Greater predictability: Compared to adjustable-rate loans, fixed-rate loans are much more predictable. Since your interest rate won’t change, you’ll know exactly what you’ll need to pay every month, helping homeowners budget appropriately.
- More protection from market volatility: When you select an adjustable-rate loan, you take on some risk, as these loans’ interest rates can change due to market conditions. In contrast, interest rates for fixed-rate loans aren’t tied to the market and may protect homeowners against market volatility throughout the entire term of their loan.
Choose BayCoast Mortgage for Your Next Fixed-Rate Loan
We are proud to offer fixed-rate loans to our clients, many of whom are new homeowners or those interested in purchasing investment properties. If you’re still deciding if a fixed-rate loan is right for you, you can always contact one of our representatives for more information. You might also want to review some of our other loan offerings, such as jumbo loans, adjustable-rate loans, and home equity loans.