The most common type of loan is the traditional fixed-rate mortgage, in which the amount of principal and interest paid each month stays the same over the life of the loan. Fixed-rate mortgages can be taken out for 10 to 30 years, and most of the time, they can be paid off at any time without any fees. This kind of mortgage is set up so that it will be paid off in full by the end of the loan term.
Even though you have a best fixed-rate mortgage, if you have an "impound account," your monthly payment may change. In addition to the monthly "principal + interest" payment and any mortgage insurance premiums (charged to buyers who put less than 20% cash down when buying a home), some lenders collect extra money each month for the prorated monthly cost of property taxes and homeowner’s insurance. The extra money is put in an impound account by the lender, who uses it to pay the borrower's property taxes and homeowners insurance premiums when they are due. If either the property tax or the insurance changes, the borrower's monthly payment will change as well. But with a fixed-rate mortgage, the total payments are very stable and easy to plan for. We've been helping people buy their dream homes for a long time, and we love what we do.