Fixed-Rate Loans

Fixed loans are generally amortized over 15 or 30 years. The interest rate remains fixed for the period of the loan. Fixed rates are most popular when interest rates are below 9%. When rates get higher homebuyers are unable to afford the higher payments required by fixed loans and may prefer to get an adjustable loan.

A very popular program with first time homebuyers is the 30-year fixed loan with a 2-1 buydown. This loan has a lower rate for the first two years. For example a 9% 30-year fixed loan with a 2-1 buydown would have a 7% rate (9%-2%) for the first year, 8% (9%-1%) for the second year, and 9% thereafter.