What Is a Fixed Rate Mortgage?
Ready to buy a home? Learn what a fixed-rate mortgage is and how it compares to its adjustable-rate mortgage counterparts. A fixed-rate mortgage, which is one of the most basic and popular types of mortgages, has an interest rate that is set when the loan is originated and does not change over time. “Fixed rate” only defines the type of loan and not the terms. For example, most fixed-rate mortgages have a duration of 15 or 30 years, but some lenders offer terms of 10, 20 or even 40 years. Occasionally, lenders offer fixed-rate mortgages with a term of five or seven years with a balloon payment for the balance due at the end. As you shop for your new home, learn more about fixed-rate and other types of mortgages so you are sure to make the right choice for your financial situation.
PMI Mortgage Insurance: Who Are The 7 U.S. Mortgage Insurers?
The 7 US mortgage insurers that provide private mortgage insurance (PMI) to lenders. Private mortgage insurance (PMI) insures the lender, not you when you buy a home with a down payment of less than 20 percent. It protects their interest in the event you default on your loan and is a requirement by lenders on loans provided to borrowers, with less than 20 percent as a down payment, toward the purchase of a home. So, essentially you are paying an insurer to protect the banks interest on your mortgage if your down payment is less than 20 percent because they are the ones taking the risk on your viability as a borrower.