30 Year Fixed Mortgage
What is a 30-year fixed rate mortgage loan?
A 30-year fixed mortgage is a loan with an interest rate that does not change for the entire 30 year life of the loan.
For example, on a $300,000 loan with a fixed interest rate of 5.00%, on a 30-year mortgage, the monthly payments will be $1,610.46. So, as long as you have that loan, the interest rate of 5.00% and payment stays the same.
In 2023, borrowers are getting their loans closed with rates in the 6- to 7-percent range per the chart below. However, anytime a chart rises so dramatically in the financial markets it typically has a downtrend period that follows.
Which type of borrower should choose a fixed loan?
Borrowers who want a non-fluctuating set amount deducted from their monthly income are best prepared for 30-year fixed mortgages. These are who don't like surprises when it comes to monthy bills. Typically, if you plan to stay in the home for over 5 to 7 years, it's a great plan as you don't have to worry about the ups and downs of the financial markets.
30 Year Fixed Requirements
Keep your payments low without worry over rising rates.
- Down Payment: At least 3% of the purchase price
- Credit Score: Satisfactory credit report with a minimum 620 credit score
- Employment Income Verified through tax returns and/or paystubs
- Debt Ratios: Below 50. Although FHA may allow 54.9%
- Liquid Assets: Meet lender's funds to close and reserve requirements
Not everyone qualifies for a 30-year fixed loan. 1st Nationwide Mortgage Corp. will do its best to helps our clients qualify for loans with or without the traditional income qualification standards
30 Year Fixed FAQ's
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What are the cons of a 30-year mortgage?
You pay more interest over the life of the loan than if you had a 15-year fixed or 20-25 year fixed.
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What is a good reason to choose a 30-year fixed rate mortgage?
A 30-year fixed mortgage provides borrowers the lowest monthly payment compared to a 15-year fixed loan. The lower monthly payment permits a more manageable payment if you have a period of low income or being laid off or hospitalized.
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Is a 30-year fixed mortgage better than a 10/1 ARM?
Currently, the mortgage interest rates for each are nearly identical. In this instance the borrower should select the 30-year fixed.