If you are looking to finance a home in California and are interested in a consistent monthly payment, a California Fixed Rate mortgage (FRM) may be an excellent choice for you.
A California Fixed rate mortgage is a financing option that makes no provision for a changing rate over the term of a loan.If your mortgage begins at 5.5% interest rate, it will end at a 5.5% interest rate.
There are several types of California fixed rate mortgages. The first is a fixed payment loan. With this type of loan, your intial interest rate is used to determine the total amount your loan will be over the term of your loan.Then the total amount is divided by the number of payments made during the term of your mortgage.
Another type of California Fixed Rate Mortgage is a fixed rate, fixed interest mortgage. With this type of loan, only your interest rate remains the same throughout the term. That interest rate is then applied to the remaining principle of your loan. As you pay down your loan, your payment will decrease as the interest will be on a lower amount.
Yet another type would be an interest only fixed rate mortgage. In an interest only fixed rate mortgage, the borrower will pay only on the interest of the loan for a predetermined amount of time, typically 5 or 10 years. After the initial term, the borrower will then begin paying payments on the interest and the principal of that loan.
The different types of California Fixed Rate Mortgages will be distinguished by specific mofifiers, such as interest only, fixed interest etc.. If your loan is a strict fixed rate mortgage (FRM) without any modifiers then it is a loan in which matching payments are made each month. For example on a $300,000 30-year 6% FRM, the 360 monthly payment made will all be $1798.66. If that payment is made every month, the 360th payment will reduce the balance to zero. On a strict fixed rate mortgage, an increased amount of your payment is put towards the principle balance each month. In the beginning of your loan, payments mostly go towards paying down the interest, however as you approach the closing months, your payments will primarily go towards the principal.
In our example above, in month $299 is put towards the principal, in month 12 that amount will rise to $316. California fixed rate mortgages are an excellent financing option if you wish to develop a consistent budget over the course of your loan, with unchanging payments.
Visit Eagle Nationwide online 24 hours a day 7 days a week www.eaglenationwideonline.com Our dedicated, knowledgeable loan officers will help to discover the best financing option for you.
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