With a fixed rate mortgage, the interest rate does not change for the term of the loan; the monthly payment is always the same. Typically, the shorter the loan period, the more attractive the interest rate will be.
Payments on fixed-rate fully amortizing loans are calculated so that the loan is paid in full at the end of the term. In the early amortization period of the mortgage, a large percentage of the monthly payment pays the interest on the loan. As the mortgage is paid down, more of the monthly payment is applied toward the principal.
The most important part of a fixed rate is the amortization period. 30 years offers the lowest payment, and (please speak with your tax advisor, for nothing I say can be used for tax advice) in most cases will be most beneficial in interest claimed on your taxes. You will own your home faster obviously, if you choose a term lower than 30 years, but your payment will be increased as well. When we speak, we will run several scenarios of different terms for your fixed rate and choose the one that works best for you long term.
Call Michael Mitchell, 530-406-2200 or 707-259-1117 or 707-337-5970 mobile.