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Arizona Fixed Rate Mortgage

A conventional fixed rate mortgage is usually 15 or 30 years in length. Some lenders are now offering 40 year mortgages to help home owners that are being priced out of the market by the recent large increases.

A 15 year mortgage may increase the monthly payment by about 25%, but you pay off your home in half the time. The amount of interest you save over the life of the loan is substantial.

Typically you are going to try and limit the first mortgage to no more than 80% of the home's appraised value so that you can eliminate Private Mortgage Insurance (PMI). PMI is basically an insurance payment required by the lender that you pay to protect the lender in case you default on your mortgage.

Some home owners may feel that they won't be in their home very long, or they may need to lower their monthly payments as low as possible so they are interested in an interest only fixed interest rate. A fixed interest only loan will either require a baloon payment in the future, or the loan payment will adjust at a predetermined point in the future. For instance the loan may begin as interest only for the first 10 years and then the monthly payment will increase for the remaining 20 years so that the loan will be paid off at the end of the 30 year term.

The benefit to any of these fixed rate mortgage options is that the interset rate is set. The interest rates never adjust. You have peace of mind that no matter which direction interest rates are moving, you are locked in. There are no surprises.

Finished read about a fixed rate mortgage? Return to our section on Arizona mortgage loans.

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