What is a Fixed-Rate Mortgage?

A fixed-rate mortgage is a home loan with an interest rate that remains unchanged for the entire loan term. This consistency means your monthly principal and interest payments stay the same, offering ease in budgeting and financial planning.

Benefits of Fixed-Rate Mortgages:

• Predictability: Stable monthly payments make it easier to manage your household budget.

• Long-Term Planning: Knowing your mortgage costs over time aids in long-term financial planning.

• Protection from Rate Increases: You're safeguarded against rising interest rates in the broader economy.

For example, for a $300,000 home with a 20% down payment, and assuming a 5% annual interest rate on a 30-year fixed-rate mortgage, the estimated monthly mortgage payment would be approximately $1,288.37 and it would remain this way for the life of the loan.

This calculation includes principal and interest but does not include other potential costs such as property taxes, homeowners insurance, or private mortgage insurance (PMI).

Choosing the Right Loan Term:

Fixed-rate mortgages commonly come in 15-year and 30-year terms. A 15-year mortgage typically has a lower interest rate but higher monthly payments, while a 30-year mortgage offers lower monthly payments but more interest paid over time. Your choice depends on your financial situation and long-term goals.

Interest Rates and Credit Scores:

Your interest rate on a fixed-rate mortgage is influenced by your credit score and market conditions. A higher credit score can secure a lower interest rate, reducing the overall cost of your loan.

Fixed-Rate Mortgage in Lehigh Valley and Bucks County:

When shopping for a fixed-rate mortgage in these regions, consider the local housing market and average mortgage rates. With over 50 years of real estate experience, our Mission Mortgage team understands the specifics of Lehigh Valley and Bucks County to find competitive rates and terms suited to your needs.

A fixed-rate mortgage can be an excellent choice for stability and peace of mind in your home-buying journey in Lehigh Valley and Bucks County. By understanding the key aspects of these loans, you can better navigate the home-buying process. For tailored advice and assistance, reach out to a knowledgeable local mortgage professional who can guide you through every step.