Today’s real estate word of the day is fixed rate mortgage. All right, Shana, tell us what it is.
A fixed rate mortgage is a mortgage in which the interest rate does not change during the entire term of the loan.
Very good. Most common, it would be a 30 year fixed rate mortgage is the most common here in the US. Gaining in popularity is the shorter term 15 year note where people, as interest rates went down, went ahead and refinanced or changed to a shorter term with hopefully about the same type of payment so they could pay their home off quicker. And so that was an option people did.
My personal feeling is I would like you to take the 30 year mortgage, have the flexibility and ability to send in more when you want to, but not the obligation to do so. Don’t over obligate yourself stay on the 30. You can send in the additional money whenever you want. They’ll accept that. Apply it. One hundred percent of that will go towards your principal balance and then you’re in more control. So if there’s ever one month when you can’t do that, for some reason some emergency comes up, you’re in a better situation. Personal editorial comment from me,
Just as now you know where Mike stands. Yes, I am. All right.
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