If you plan on buying a home, determining the type of home loan you’ll need is one of the most important steps. Although there are various types of loans available, there are two primary types: adjustable mortgages and fixed-rate mortgages.
What is a Fixed Rate Mortgage?
A fixed-rate mortgage is a loan where the interest rate stays the same for the entire period. Whether you have a 30 year loan, 20 year loan, or 15 year loan, your monthly payment will never change.
What are the Benefits of Fixed-Rate Mortgages?
Many people prefer fixed-rate mortgages because of the security of predictable monthly payments. Fixed-rate mortgages are also more straightforward and easier to understand.
While you are protected against rising rates, if the market suddenly changes and rates drop significantly, you will need to refinance your mortgage to take advantage of the lower rates.
How is the Interest Rate Determined?
At most institutions (not People’s), your interest rate is determined primarily by your credit score and down payment; poor credit often results in higher interest rates. This is why it’s often recommended to improve your credit score before applying for a loan. At People’s Community Federal Credit Union, every member gets the same rate, regardless of credit score. If you are approved for a home loan, your credit score doesn’t matter.
The only difference in rate is based on the term of the loan, 30 year loans will have a higher rate than 15 year loans, for example.
The amount you’re putting down toward the home purchase can be an important factor. The greater the percentage of your down payment, the less you will need to borrow. As a result, your monthly payment will be lower, making the loan more affordable and increasing your chances of qualifying.
Is a Fixed Rate Mortgage Right for You?
Fixed-rate mortgages are preferred by borrowers who have a tight budget and want a consistent payment so they can stay on track with their finances, and anyone that wants to protect themselves from rising rates.
Fixed-Rate Mortgages in Clark County WA
Choosing the right mortgage loan for your needs can be overwhelming. If you need help narrowing down your options, People’s Community Federal Credit Union is here for you. We offer fixed-rate mortgages with terms of 10 years, 15 years, 20 years, or 30 years. You can borrow up to 80% of the current value of your home.
While we do look at your credit history and several other factors to determine if you qualify for your home loan, at People’s you are not a number and the interest rate does not change based on your credit score or down payment. Everyone gets the same great rate on their Fixed Rate Home Loan.
Give us a call today and start your home loan application process. We proudly serve the Clark County WA community!
A Guide to Fixed Rate Mortgages in Vancouver WA
5 Local Branches Serving Greater Vancouver WA: