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You are probably familiar with a fixed rate mortgage. Your parents more than likely had one, as did their parents before them. The major advantage of fixed rate mortgages is that they present predictable housing costs for the life of the loan. Some fixed rate mortgages you will probably hear about are:

  • 30-Year Fixed Rate Mortgages
  • 15-year Fixed Rate Mortgages
  • Biweekly Mortgages
  • "Convertible" Mortgages

When people thought of a mortgage 10 to 50 years ago, they thought of a 30-year fixed rate mortgage. This traditional favorite is not the only choice nowadays because volatile financial times created a whole new range of selections. However, the 30-year fixed rate mortgage may still be the best mortgage for your circumstances. It offers the lowest monthly payments of fixed rate loans, while providing for a never-changing monthly payment schedule. Some lenders offers 25, 20, and even 40-year term mortgages as well. But remember, the longer the term of the loan, the more total interest you will pay.

The 15-year fixed rate mortgage allows homeowners to own their homes free and clear in half the time and for less than half the total interest costs of the traditional 30-year loan. The loan's term is shortened by the 10 percent to 15 percent higher monthly payments. Some homebuyers prefer this mortgage because it allows them to own their home before their children start college. Others prefer it because they will own their home free and clear before retirement and probable declines in income.

The major disadvantages of the 15-year fixed rate mortgage are the sometimes higher monthly payments. But if saving on total interest costs and cutting the time to free and clear ownership are important to you, the 15-year fixed rate mortgage is a good option.

The biweekly mortgage shortens the loan term to 18 to 19 years by requiring a payment for half the monthly amount every two weeks. The biweekly payments increase the annual amount paid by about 8 percent and in effect pay 13 monthly payments (26 biweekly payments) per year. The shortened loan term decreases the total interest costs substantially. The interest costs for the biweekly mortgage are decreased even farther, however, by the application of each payment to the principal upon which the interest is calculated every 14 days. By nibbling away at the principal faster, the homeowner saves additional interest. Remember, however, that you trade lower total interest costs for fewer mortgage interest reductions on your federal income tax. Your ability to qualify for this type of loan is based on a 30-year term, and most lenders who offer this mortgage will allow the homebuyer to convert to a more traditional 30-year loan without penalty. Availability is limited on this mortgage, but it can be worth looking for.

 Types of Mortgages
- Fixed Rate Mortgages
- Mortgages That Change
- Adjustable Rate Mortgages
- An Option For Older Homeowners
- FHA/VA Mortgages
- Creative Financing or Seller-Assisted Mortgages
 Tax Advice
- How to claim mortgage interest deductions
- Reporting the sale of real estate in Schedule D
- Deducting mortgage points at tax time
- How refinancing affects your taxes
- Deducting Taxes You Already Paid
- Forgotten Tax Deductions
 Articles
- Divorce and Your Home
 Calculators
- Future Value Spread Calculator
- Simple Loan Calculator
- Refinance Calculator
- Rent/Buy Calculator
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