One of the reasons many people refinance their existing mortgage is to stabilize their monthly payment with a fixed rate mortgage. Many homebuyers are drawn to adjustable rate mortgages for their low starting rates, but after the initial fixed period expires their monthly payment fluctuates according to the market. Refinancing their mortgage gives them the ability to lock their payment and gain the security of knowing their monthly payment will remain fixed.
If you're looking for the security and predictability of fixed monthly mortgage payments, then a fixed rate home loan is a preferable option for you. A fixed mortgage rate for your home purchase or refinance offers the stability of consistent monthly principal and interest payments and allows a homeowner to more easily set a monthly budget without having to worry about unexpected changes in mortgage rates.
With a fixed rate mortgage, repayment of the loan is amortized, or spread out, into equal monthly payments over the length of the loan term. In the first years of paying your mortgage, since your loan balance is at its highest, most of your payment will be allocated towards interest. As that balance is paid off over time, more and more of that payment goes towards principal. But with a fixed rate, the total principal and interest payment will be unchanged from month to month throughout the loan term.
It’s important to note that although the principal and interest payment does not change with a fixed rate loan, the overall payment could increase or decrease over time due to other changes such as to the amount needed to fund an escrow account, the elimination of mortgage insurance, or the addition of fees and/or penalties due to late or missed payments.
eLEND can help you convert to a fixed rate mortgage via the following programs:
Fixed rate loans can be used to refinance a primary residence, second or vacation home, or an investment property. Refinancing is also available for single family homes, condos, manufactured homes on owned land, and two-to-four unit multi-family properties.