The traditional fixed rate mortgage is the most common type of loan program, where monthly principal and interest payments never change during the life of the loan. Fixed rate mortgages are available in terms ranging from 10 to 30 years and can be paid off at any time without penalty. This type of mortgage is structured, or "amortized" so that it will be completely paid off by the end of the loan term. There are also "bi-weekly" mortgages, which shorten the loan by calling for half the monthly payment every two weeks. (Since there are 52 weeks in a year, you make 26 payments, or 13 "months" worth, every year.)
Even though you have a fixed rate mortgage, your monthly payment may vary if you have an "impound account". In addition to the monthly loan payment, some lenders collect additional money each month (from folks who put less than 20% cash down when purchasing their home) for the prorated monthly cost of property taxes and homeowners insurance. The extra money is put in an impound account by the lender who uses it to pay the borrowers' property taxes and homeowners insurance premium when they are due. If either the property tax or the insurance happens to change, the borrower's monthly payment will be adjusted accordingly. However, the overall payments in a fixed rate mortgage are very stable and predictable.
We have been helping customers afford the home of their dreams for 39 years with over $ 1.4 billion dollars in closed residential loans and we love what we do!
Illinois Mortgagee License # MB 6761275
Florida Mortgage License # MB 4398
Company NMLS: 1656794
Regulated by: Illinois IDFPR-Director Rehwinkel 122 S. Michigan Avenue Chicago, IL 60603 217-785-0820
President and Managing Partner
840 S. Northwest Highway Suite #202
BARRINGTON, Illinois 60010
Phone: (847) 717-9005
Fax: (800) 466-8091