FHA & VA Fixed rate loans are often the choice for homeowners, since fixed rate home loans do not

conform to the standard market Prime Rates. Fixed rate home loans give homeowners a peace of mind,

since the interest on the loans does not change during the term of the loan. On the other hand, the

adjustable rate home equity loans are in sync with the marketing Prime Rates and the rates often

change during the course of the loan.

The main advantage of a FHA and VA fixed-rate home loan is that the borrower is protected from sudden and potentially significant increases in monthly mortgage payments if interest rates rise. Fixed-rate mortgages are easy to understand and vary little from lender to lender. The downside to fixed-rate mortgages is that when interest rates are high, qualifying for a loan is more difficult because the payments are less affordable.

For more information on Prime Rates, homeowners should look for information regarding retail

prime lending rate (RPLR). Homeowners considering retail prime lending rate loans or adjustable

rate loans are subject to interest changes every quarter. Thus, if the rates of interest on adjustable

loans increase, then the loan interest is also subject to increase–and likewise if there are reductions,

then the loan amount will reduce on interest.

As you can see, fixed rate loans can offer stability on repayments, while the adjustable rates may

pose a threat to the homeowner. Thus, the interest rates make a difference in the payoff of home

loans. If the homeowner is paying more toward interest and less toward mortgage, then the

term of the loan is often the length of payoff. Few lenders offer home equity loans that enable

homeowners to payoff the mortgage sooner; however, you will want to be careful ,since these loans

may have higher rates of interest. Still, if the rates of interest are fixed -rate, it may work out, since

over time, the interest may decrease, providing you make payments on time. Additionally, some

lenders offer the zero-point system loans, which present options for homeowners to use the points to

pay off a percentage of interest/mortgage, or use the points to payoff upfront fees on a closing loan.