The Mortgage Process

Will my fixed rate mortgage payment fluctuate throughout the life of the loan? What is a Fixed-Rate Mortgage?

A fixed-rate mortgage is a home loan option with a particular interest cost for the entirety of the loan. Even if you have a fixed-rate mortgage the monthly payment amount may fluctuate during the life of the loan. A fixed-rate loan offers a fixed term (for example, 15 or 30 years) as well as a fixed interest rate, so the monthly amount for the payment of principal and interest will not change during the term of the mortgage. However, your monthly mortgage payment may also include interest, taxes, and insurance. While your principal and interest amounts will not change, the amount needed for taxes and insurance may.

Once a year, on the anniversary date of the mortgage, Mortgage Center will perform an escrow analysis to determine if current monthly deposits balances will provide sufficient funds to pay property taxes, hazard insurance and other bills when they come due. Please be aware that property taxes may go up considerably on purchase transactions from what the previous owner paid. The municipality where the property is located reassesses the taxable value of the property when it transfers ownership. As the property’s taxable value is no longer governed by the rate caps used when the property remains under the same owner, the required property taxes may increase considerably. If your payment amounts have fluctuated, Mortgage Center will have to adjust the amount needed in your escrow accounts to compensate for these changes.