Synonyms: Conventional Mortgage, Traditional Mortgage
Defintion: A mortgage, usually of a period of 15 to 30 years, taken out with a financial institution at an interest rate that remains the same throughout the life of the loan.
This type of loan can be compared to an Adjustable Rate Mortgage. The benefit of a Fixed-Rate Mortgage is that you will always have the same payment over the life of the loan, making it easier to budget. The downside when compared to am Adjustable Rate Mortgage is that, should average national interest rates be lowered after you take out your loan, your rate will remain the same. However, should those rates increase after you sign your loan, your mortgage interest will still remain the same, whereas the interest rates on an Adjustable Rate Mortgage would increase.
See Also: Adjustable Rate Mortgage, Interest-Only Mortgage
Definition: An agency of the United States federal government within the Department of Housing and Urban Development. The FHA provides mortgage insurance for qualifying residential mortgages and sets the standards for housing construction and loan underwriting.
Should you be a qualifying low to middle-income household, you may be able to receive mortgage insurance through the FHA at a lower cost than traditional mortgage insurance. The FHA does not loan money, so you must still see a financial institution and, possibly, your local housing authority to see if you qualify.
Website: http://www.fha.gov
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