Vocabulary homework isn’t really something any adult wants to dive into, but if you’re in the housing market, there are a few words you should know the definitions of to ensure you’re ready for the home-buying process! Below is the first in a series of “Terms You Need to Know” that we’re sharing.
Fixed Rate Mortgage
The term “fixed-rate mortgage” refers to a home loan that has a fixed interest rate for the entire term of the loan.
These loans often are made for 15, 20, or 30 years, and while the monthly payments never change, the monthly payments go more towards interest at first, increasingly going towards the principal over the life of the loan. This is in contrast to adjustable rate mortgages (ARM) whose interest rates change at different intervals over the life of the loan and usually last less than 10 years. (Cornell)
If vocab lessons aren’t your thing, we have some great news… We truly pride ourselves on being a family-run company that actually walks people through the home-buying experience WITHOUT any pressure – truly. If you need help, just give us a call. Otherwise, cheers to dipping your toes into this housing market vocabulary. We hope the little nuggets of information we share increase your home-buying know-how!