Fixed-rate mortgage tips for choosing, locking, and managing your loan

Written by Samantha SheltonNMLS 1647301Updated October 2026

One fixed-rate mortgage tip costs nothing and is easy to skip: get more than one quote. Freddie Mac’s research on rate dispersion found that borrowers who collected two rate quotes could have saved as much as $600 a year, and borrowers who collected four or more could have saved more than $1,200 a year (Freddie Mac research brief, February 16, 2023, using 2010 to 2022 rate data).

Hardly anybody does it. Almost half of consumers who take out a mortgage for a home purchase fail to shop before application, they seriously consider only a single lender or broker, and about 77% applied to only one lender, per the National Survey of Mortgage Borrowers run jointly by the CFPB and FHFA (CFPB, Consumers’ Mortgage Shopping Experience, January 2015; 2013 purchase-borrower cohort). Your credit score, down payment, term, and points all matter too, but none of them is free the way a second quote is.

Learn the fixed-rate mortgage tips that actually move your number: how to compare competing offers line by line, how to pick between a 15- and 30-year term, when discount points earn back their cost, and how to handle your rate lock. If you’re still choosing a product, start with our Loan Types & Programs guide.

Key takeaways:

• Shopping is the cheapest rate reduction available: Two rate quotes were worth as much as $600 a year and four or more were worth more than $1,200 a year in Freddie Mac’s February 2023 dispersion research, and the newest FICO scoring models treat all mortgage inquiries inside a 45-day span as a single inquiry, so the extra quotes don’t compound the hit to your score.
• Term drives total cost more than anything else you choose: On a $300,000 loan at an illustrative 5.75%, a 15-year fixed runs about $2,491 a month against about $1,896 for a 30-year at an illustrative 6.5%, roughly 31% more per month, and about $234,000 less interest across the full term.
• Your rate lock is a contract with a clock: Locks are commonly written for 30, 45, or 60 days, extensions can cost you a fee even when the delay is the lender’s, and your lender owes you a revised Loan Estimate no later than three business days after the rate is locked.

Hypothetical example, not an offer. Actual rates, costs and payments vary.

What is a fixed-rate mortgage?

A fixed-rate mortgage is a home loan whose interest rate is set at closing and cannot change for the life of the loan, which makes your principal and interest payment the same in month 1 and month 360. That single trait is the whole product: you trade the chance of a falling rate for certainty about what you owe.

The dominant terms are 30 and 15 years, though lenders write fixed loans at 10, 20, and 25 years too. Fixed loans sit on one side of a structural split our Fixed & Adjustable Structures hub maps in full.

Who should choose a fixed-rate mortgage?

Choose fixed when you expect to hold the loan longer than an adjustable-rate mortgage’s introductory period, typically five, seven, or ten years. An ARM’s lower opening rate is compensation for taking on adjustment risk once that period ends, so a short expected hold can favor an ARM while a long one makes the fixed rate worth more. Our side-by-side on fixed- vs. adjustable-rate mortgages works through where the crossover lands.

Fixed also suits anyone whose budget has no room to absorb a payment increase. The honest counterweight: it cuts both ways, since you get no benefit from a falling market unless you refinance. Our writeup of fixed-rate mortgage benefits and drawbacks argues both.

How common are fixed-rate mortgages, and what does that mean for shopping?

The CFPB’s loan comparison page, last modified February 18, 2026, reports that fixed-rate loans were chosen by 85 to 95% of buyers from 2008 through 2022, against 70 to 75% historically, while adjustable-rate loans fell to 5 to 15% of buyers from 25 to 30% historically, according to the CFPB’s guide to the different kinds of loans. The Urban Institute’s September 2026 chartbook, drawing on the Mortgage Bankers Association’s weekly applications survey, reports that the adjustable-rate share of applications largely remains within its historical range of 5 to 10 percent of total applications (Urban Institute, Housing Finance at a Glance, September 2026).

The CFPB’s Consumer Handbook on Adjustable-Rate Mortgages, the booklet lenders hand out under 12 CFR 1026.19(b)(1), says to consider a fixed rate if you prefer predictable payments or plan to keep your home for a long period of time. If you are weighing the other side, ask which index an adjustable quote follows: per the New York Fed’s SOFR transition page, all USD LIBOR panel settings ceased June 30, 2023, and SOFR is today the dominant U.S. dollar interest rate benchmark. Our guides to adjustable-rate mortgage pros and cons and how adjustable-rate mortgages reset cover what happens after the opening period.

Newer survey data shows most buyers still stop at one application. The National Survey of Mortgage Originations found that 42% of 2023 purchase borrowers seriously considered only one lender or broker and 66% applied to only one, per the FHFA National Survey of Mortgage Originations tabulations (Appendix D, Tables 8 and 9). Shopping matters most on shorter terms: the CFPB loan guide, last modified February 18, 2026, says a shorter term’s rate is usually lower, by as much as a full percentage point, and that rates vary among lenders, especially for shorter terms.

Tip 1: Get at least four rate quotes, and compare them on paper

Four quotes was the threshold in Freddie Mac’s data where annual savings passed $1,200. Competition pays because of dispersion: the spread between lenders on similar applications averaged under 20 basis points from 2010 through 2021, then widened to roughly 50 basis points in October and November 2022. The more lenders disagree about what your file is worth, the more shopping is worth.

Comparison only works if you compare the same object. Three rules make that possible:

• Insist on the Loan Estimate, not a verbal number: A creditor must deliver or mail one no later than three business days after receiving your application. Its categories, order, and math are set by federal rule, so two Loan Estimates read side by side without translation.
• Compare the APR, not just the rate: The interest rate is what you pay each year to borrow, and as the CFPB puts it, it does not reflect fees or other charges. The APR reflects the rate plus points, mortgage broker fees, and other charges you pay to get the loan. Which is why it’s usually higher. Read the CFPB on the difference between interest rate and APR first.
• Collect the quotes close together: Every inquiry still appears on your credit report, but FICO’s scoring models count a cluster of them as one: the newest FICO versions treat any 45-day span of mortgage inquiries as a single inquiry, and older versions use a 14-day span. FICO also ignores mortgage inquiries made in the 30 days before scoring. Shopping past the window is still usually worth it. One more inquiry is small next to the money on the table.

HUD titles its consumer brochure with three verbs, Looking for the best mortgage: shop, compare, negotiate, and the third is the one borrowers skip. A competing Loan Estimate is leverage; bring it to the lender you’d rather use. See HUD’s mortgage shopping guidance for the full checklist.

For market context, Freddie Mac’s weekly average mortgage rates post each Thursday at 12 p.m. ET in the Primary Mortgage Market Survey, which has tracked the 30-year fixed since April 1971 and added the 15-year series in 1991. Use it to judge whether your quotes are in a sane range, not as a rate you’re owed.

How do you read a fixed-rate offer on the Loan Estimate?

Under 12 CFR 1026.37(b)(6), the Loan Terms table asks “Can this amount increase after closing?” beside the loan amount, the interest rate and the monthly principal and interest. On a fully amortizing fixed-rate loan, the interest rate and payment answers read no; a yes on either means the loan can adjust or step up, and it is not the same product as the other quotes. The CFPB notes you can find the interest rate on page 1 under “Loan Terms” and the APR on page 3 under “Comparisons” (CFPB, last reviewed August 28, 2026).

That page 3 Comparisons table, per section 1026.37(l), carries an “In 5 Years” line showing the total you will have paid in principal, interest, mortgage insurance and loan costs, plus the principal you will have paid off, and a Total Interest Percentage, defined as “The total amount of interest that you will pay over the loan term as a percentage of your loan amount.” Hypothetical example, not an offer: using the illustrative table in Tip 2 below, about $148,400 of interest on $300,000 is a TIP of about 49.5% for the 15-year term, and about $382,600 is about 127.5% for the 30-year term.

Check the lock line before you compare prices. The CFPB’s Loan Estimate explainer notes that some lenders may lock your rate as part of issuing the Loan Estimate, but some may not, and of origination charges it says, “It’s the total that matters.” The Federal Reserve Board’s Consumer’s Guide to Mortgage Lock-Ins adds that it is wise to get a written, rather than verbal, lock-in agreement, and that if a lock-in expires, most lenders will offer the loan based on the prevailing interest rate and points. Our APR guide explains the page 3 rate, and closing costs covers the fees behind it. The free Loan Estimate check reads a Loan Estimate PDF in your browser and lists questions to ask before you sign.

Tip 2: Choose your term with the total-cost math in front of you

The term you pick changes your lifetime interest more than any negotiation will. On a $300,000 loan, the illustrative figures below show a 15-year fixed costing roughly $595 more per month than a 30-year while saving roughly $234,000 in total interest.¹

Hypothetical example, not an offer. Actual rates, costs and payments vary.

Two things that table can’t show. First, the payment gap moves with the rate spread between terms, so run your own numbers rather than assuming 31%, priced at the same rate, the 15-year payment lands closer to 38% above the 30-year. Second, a 30-year loan can be paid like a 15-year loan, but never the reverse: the lower required payment is an option you keep, the higher one an obligation you sign. Our full 15-year vs. 30-year mortgage comparison runs both schedules year by year.

Tip 3: Run the break-even before you buy discount points

One discount point costs 1% of the loan amount, $3,000 on a $300,000 loan, and that part is fixed. What it buys is not. The CFPB is explicit that the rate reduction per point depends on the specific lender, the kind of loan, and the overall mortgage market: sometimes the reduction per point is relatively large, sometimes smaller. Any article quoting a universal “quarter point per point” is describing a habit, not a rule.

So ask for the number instead of assuming it. Have each lender quote the same loan with and without points, then divide the upfront cost by the monthly savings to get your break-even month. Illustratively: if $3,000 in points moves a 30-year $300,000 loan from 6.5% to 6.25%, the payment falls from about $1,896 to about $1,847, $49 a month, so you break even at about 61 months. Sell, refinance, or pay off before then and the points lost money.

Hypothetical example, not an offer. Actual rates, costs and payments vary.

Points are common enough to deserve that scrutiny: in HMDA data for the first three quarters of 2023, 58.7% of home purchase borrowers paid discount points at a median of 1.0 point (CFPB Data Spotlight, April 2024). Buying points is a bet on how long you’ll hold the loan, make it deliberately.

Tip 4: Treat your rate lock like a contract with a deadline

A rate lock means your rate won’t change between the offer and closing, as long as you close inside the window and nothing important changes about your application. That second condition is where borrowers get surprised.

• Lock length: Locks are typically available for 30, 45, or 60 days, sometimes longer. Match the window to your realistic closing timeline, not your optimistic one.
• Extension fees: If you don’t close before the lock expires, the CFPB warns it may be expensive to extend. Ask what an extension costs before you lock, not after.
• What voids a lock: A lock holds only if your application stays the same. If the home appraises below the sale price, or the lender can’t verify your income, your rate can change.
• Float-down options: Some lenders offer a one-time float-down that captures part of a market improvement after locking, usually for a fee or only past a minimum threshold. Terms are set lender by lender, so ask about it by name rather than assuming it.²
• Your paperwork checkpoint: If your rate wasn’t locked when you got your Loan Estimate, the creditor must give you a revised one no later than three business days after the rate is locked, showing the revised rate, points, and lender credits. Check your lock confirmation against it.

Our explainer on what a mortgage rate lock is covers the timing decision itself, when locking early protects you and when it costs you.

Tip 5: Fix the inputs you still control before you apply

Your rate is priced off your file, and much of that file is still movable in the months before you apply.

• Credit score: Applying with a higher credit score generally means a lower interest rate, and the CFPB’s Explore Interest Rates tool lets you see the spread for your own score, loan type, and state before you talk to anyone. Because lenders price in score bands rather than point by point, clearing the next band up is often the largest single pricing improvement available, and it costs only time.
• Down payment: More down means a smaller loan and a lower loan-to-value ratio, and at 20% down on a conventional loan it removes private mortgage insurance entirely.
• Debt-to-income ratio: Fannie Mae caps total DTI at 36% on manually underwritten loans, exceedable to 45% with the credit score and reserves in its Eligibility Matrix, and allows up to 50% on casefiles underwritten through Desktop Underwriter (Selling Guide B3-6-02). Paying off a car loan can move you a tier.
• New credit: Don’t open anything between application and closing. Lenders recheck, and a new account can reprice or unravel an approved file.

What makes a loan a true fixed-rate mortgage under federal and agency rules?

Fannie Mae’s Selling Guide topic B2-1.4-01, Fixed-Rate Loans (dated December 14, 2022) says Fannie Mae buys or securitizes conventional, fully amortizing, fixed-rate first mortgages with level monthly installments of principal and interest due on the first day of each month and interest paid in arrears, and it permits a temporary buydown only on a principal residence or second home. Freddie Mac’s fixed-rate mortgage page (viewed October 28, 2026) says its fixed-rate loans for single-family homes are used mostly for 1- to 4-unit primary residences, condominiums, second homes, manufactured homes and investment properties.

Federal law draws a similar line for a qualified mortgage. Under 15 U.S.C. 1639c, a qualified mortgage cannot have negative amortization or interest-only features, and its term generally cannot exceed 30 years. Regulation Z, at 12 CFR 1026.43(e)(2), requires regular periodic payments that are substantially equal and that do not increase the principal balance. A quote with a fixed rate but an interest-only period or a balloon is a different loan: the CFPB’s balloon payment explainer says balloon loans generally run 5 to 10 years, compared with 15 to 30, and the final payment is generally more than two times the loan’s average monthly payment. Our guides to mortgage amortization and amortization schedules show how a fully amortizing payment retires the balance.

How to manage a fixed-rate mortgage after closing

A fixed rate locks principal and interest. It does not lock your total payment. Property taxes and homeowners insurance keep moving, and if you escrow, your monthly payment moves with them.

• Read the annual escrow statement: Your servicer must send one within 30 calendar days of the end of the escrow computation year, after running an escrow analysis. It explains any payment change.
• Know the cushion rule: A servicer may hold a cushion no greater than one-sixth of estimated total annual escrow payments about two months’ worth. A lower limit in your loan documents governs instead.
• Pay extra principal if the term still bothers you: This is how a 30-year loan gets a 15-year outcome without a 15-year obligation. Regulation Z permits a prepayment penalty only on a qualified mortgage with a fixed rate that cannot increase after closing, only when the loan is not a higher-priced mortgage loan, and only during the first 36 months, capped at 2% of the amount prepaid in the first two years and 1% in the third. A creditor offering one must also offer a comparable loan without a penalty.
• Revisit, don’t set and forget: A fixed rate gives you no automatic benefit from a falling market. Refinancing is the only way to capture one, and it carries its own closing costs and break-even.

What happens when your escrow account runs a surplus or a shortage?

A fixed rate locks principal and interest, not the whole payment. Per the CFPB’s escrow account explainer, the escrow share moves when the tax or insurance bills it pays move, so your total monthly payment can change on a fixed-rate loan. Once a year the servicer’s escrow analysis compares what it collected with what it paid out and decides what happens to the difference. Under 12 CFR 1024.17(f), if the analysis shows a surplus of $50 or more and your payments are current, the servicer must refund it within 30 days of the analysis; under $50, it may refund it or credit next year’s payments.

A shortage works differently. Under 12 CFR 1024.17(f)(3), if it is less than one month’s escrow payment, the servicer may leave it alone, ask you to repay it within 30 days, or spread it over equal monthly payments across at least 12 months. If it is one month’s payment or more, the servicer may leave it alone or spread it over at least 12 months. Our guides to mortgage escrow accounts and payments, escrow and servicing cover how to read the statement.

What should Michigan borrowers know about a fixed-rate mortgage?

Federal rules allow a prepayment penalty on a qualified mortgage only when its annual percentage rate cannot increase after closing, which a fixed rate meets: under Regulation Z, 12 CFR 1026.43(g), a fixed-rate qualified mortgage that is not higher-priced may carry one of up to 2% in each of the first two years and 1% in the third, and none after that. Michigan narrows that for many home loans. MCL 438.31c(2)(c) caps the fee on a first-lien loan secured by a single family dwelling at 1% of the amount prepaid in the first 3 years and bars any fee after that, though loans insured or guaranteed by the federal government or a federal agency are outside the rule. On a fixed-rate offer, check the Prepayment Penalty line in the Loan Terms table on page 1 of the Loan Estimate, required by 12 CFR 1026.37(b)(4). If it reads yes, ask the lender which rule sets the cap. Hypothetical example, not an offer: a $15,000 extra principal payment in year two on a loan the Michigan rule covers could carry a fee of no more than $150.

The bigger Michigan surprise sits in escrow. In Michigan, a home’s taxable value is capped while one owner holds it. The year after it sells, that cap comes off and taxable value resets to the state equalized value, which is half of the assessor’s estimate of market value, not automatically half of what you paid. The reset shows up on the tax bills in the calendar year after the transfer, per Michigan Treasury’s transfer of ownership guidance. After that, MCL 211.27a limits each year’s taxable value increase to the lesser of 5% or the inflation rate, plus additions, and the State Tax Commission’s Bulletin 14 of 2025 set the 2026 inflation rate multiplier at 1.027, or 2.7%, a figure local units cannot change. Your principal and interest stay fixed; the tax line in your escrow payment does not.

Samantha Shelton, Align’s broker owner, plans around the new owner’s bill for that reason: “I don’t want to make a house look artificially cheaper because I used the seller’s old tax bill.” Our guide to property tax assessments covers how the assessor sets value, the Michigan uncapping study measures the jump across the state, and the Michigan property tax calculator looks up the published millage for an address.

FAQ: Fixed-rate mortgage tips

Here are answers to common questions about getting and managing a fixed-rate mortgage.

How many mortgage quotes should you get?

At least four. Freddie Mac’s February 2023 research brief found two rate quotes could have saved as much as $600 a year, while four or more could have saved more than $1,200. Because the newest FICO models score all mortgage inquiries inside a 45-day span as one inquiry, extra quotes cost you almost nothing, and a broker collects competing offers from one application. See the benefits of working with a mortgage broker.

Should you buy discount points on a fixed-rate mortgage?

Only if you’ll hold the loan past the break-even point. One point costs 1% of the loan amount, but the rate reduction it buys is not standardized. The CFPB notes it depends on the lender, the loan type, and the market. Get the same loan quoted with and without points, then divide the upfront cost by the monthly savings. In the illustrative example above, $3,000 saving $49 a month breaks even at about 61 months. Our guide to mortgage rate buydowns covers permanent and temporary versions.

Is a 15-year or 30-year fixed-rate mortgage better?

It depends on your budget headroom. A 15-year fixed usually carries a lower rate and cuts total interest sharply, about $234,000 less on the illustrative $300,000 example above, but the payment runs roughly 31% higher there, and closer to 38% higher if both terms were priced identically. Choose 15 years if the payment fits comfortably; choose 30 to keep the flexibility and pay extra principal voluntarily. Our 15-year vs. 30-year comparison shows both schedules.

What happens if rates drop after you lock your mortgage rate?

Nothing, with a standard lock. Your rate stays where it is. Some lenders offer a float-down that captures an improvement once, typically for a fee or only past a set threshold, and those terms vary lender by lender rather than following an industry standard. Ask about float-down availability, the expiration date, and extension costs before you lock, not after. Our explainer on mortgage rate locks covers the timing decision.

Are mortgage points tax deductible?

Often, yes, though deducting them does not change Tip 3’s break-even month, which weighs the points’ cost against monthly savings. The IRS treats points as prepaid interest; those on a refinance, a second home or most new loans are generally deducted ratably over the term, per IRS Topic 504, last reviewed September 24, 2026. Points on a loan to buy or build your principal residence can be fully deducted the year paid if you itemize and meet its tests.

Can you pay off a fixed-rate mortgage early without a penalty?

Usually. The CFPB says not all mortgages have a prepayment penalty, and where one exists it typically applies only if you pay off the entire balance, for example by selling or refinancing, within a set number of years, usually three or five. Penalties do not normally apply to extra principal paid in small chunks, according to the CFPB’s prepayment penalty explainer. The mortgage payoff calculator shows how extra payments change your payoff date.

Can a fixed-rate mortgage be assumed by a buyer?

Not a conventional one that Fannie Mae buys. Its Selling Guide states that conventional fixed-rate loans are not assumable as of the note date, and lenders must deliver them with the assumption indicator set to false, per Fannie Mae Selling Guide B2-1.4-01. Government-backed loans follow their own agency rules, so if a seller advertises an assumable rate, ask the servicer for the note’s written assumption terms before you build an offer around it.

Why do homeowners refinance into a fixed-rate mortgage?

Stability is a common reason. Among 2023 refinance borrowers in the National Survey of Mortgage Originations, 48% called changing to a fixed-rate loan an important reason, per FHFA’s NSMO tabulations. Fewer owners have a rate reason to refinance today: the Urban Institute’s September 2026 chartbook reported that the share of outstanding agency mortgages considered refinanceable fell to 2.7% in August 2026, from 11.5% in February 2026. See our refinancing guide.

The bottom line on fixed-rate mortgage tips

A fixed-rate mortgage sets your principal and interest for the life of the loan, and the biggest savings come before you sign. Get at least four quotes, Freddie Mac’s February 2023 research put that at more than $1,200 a year against as much as $600 for two, and compare them as Loan Estimates and APRs, not as rates. Pick your term on total-cost math: about $234,000 in interest separated the 15- and 30-year options on the illustrative $300,000 loan above. Buy points only past their break-even month, and treat your lock as a deadline you manage.

If you’re ready to see what a fixed-rate loan actually costs on your file, talk to Align Lending. We’re the comparison step. We collect competing wholesale quotes for your scenario and put the rate, points, and fees side by side, so you don’t have to call four lenders yourself. Call 248-506-5727 or start online.

Footnotes:

1. Example figures in this article are hypothetical and for educational purposes only; they do not constitute an advertisement of credit terms or a rate quote under federal or state lending laws. The 5.75% and 6.50% rates are illustrative values chosen to demonstrate the math, not quoted or current rates. Monthly principal and interest, total interest, and break-even figures are computed by standard fixed-rate amortization on a $300,000 loan over 180 or 360 monthly payments and exclude taxes, insurance, and mortgage insurance. Your rate and terms depend on your application, your property, and market conditions. Return to text.

2. Float-down features, lock extension pricing, and lock length availability are set by individual lenders, not by regulation, and vary across the lenders in Align Lending’s network. Align Lending is a broker and does not set these terms; confirm the specific terms in your lock agreement with the lender that holds your loan. Return to text.

Figures current as of August 2026; verify current limits and rates with the linked source before relying on them.

Sources: annual savings of as much as $600 from two rate quotes and more than $1,200 from four or more rate quotes, and rate dispersion averaging less than 20 basis points from 2010 through 2021 versus about 50 basis points in October and November 2022, Freddie Mac, “When Rates Are Higher, Borrowers Who Shop Around Save More” (research brief, February 16, 2023). Almost half of consumers who take out a mortgage for home purchase fail to shop prior to application, seriously considering only a single lender or mortgage broker, and about 77 percent of borrowers applied to only one lender, Consumer Financial Protection Bureau, “Consumers’ Mortgage Shopping Experience: A first look at results from the National Survey of Mortgage Borrowers” (January 2015), a survey jointly funded and developed with the Federal Housing Finance Agency covering 2013 purchase borrowers. Loan Estimate delivered or placed in the mail no later than three business days after the creditor receives the consumer’s application, 12 CFR § 1026.19(e)(1)(iii). Revised Loan Estimate provided no later than three business days after the date the interest rate is locked, showing the revised rate, points and lender credits, 12 CFR § 1026.19(e)(3)(iv)(D). Interest rate does not reflect fees or other charges while APR reflects the interest rate, points, mortgage broker fees and other charges paid to get the loan, Consumer Financial Protection Bureau. Rate-shopping treatment of mortgage inquiries, any 45-day span in the newest FICO Score versions and any 14-day span in older versions counted as a single inquiry, and inquiries in the 30 days prior to scoring ignored on loans that commonly involve rate shopping, FICO (myFICO, “Credit Checks and Inquiries”). Rate locks typically available for 30, 45 or 60 days and sometimes longer, the caution that it may be expensive to extend, and rate changes where the appraisal comes in higher or lower than expected or the lender cannot document income, Consumer Financial Protection Bureau, “What is a lock-in or a rate lock?” One point equals one percent of the loan amount and the rate reduction per point depends on the specific lender, the kind of loan and the overall mortgage market, Consumer Financial Protection Bureau. Discount points paid by 58.7% of home purchase borrowers at a median of 1.0 point and by 88.5% of cash-out refinance borrowers at a median of 2.1 points, first three quarters of 2023 HMDA data, CFPB Data Spotlight (April 2024). Applying with a higher credit score generally means being offered lower interest rates, Consumer Financial Protection Bureau, Explore Interest Rates. Weekly publication of the 30-year and 15-year fixed-rate averages, release each Thursday at 12 p.m. ET, the survey’s start in April 1971 and the addition of the 15-year series in 1991, Freddie Mac Primary Mortgage Market Survey. Maximum total debt-to-income ratio of 36% on manually underwritten loans, exceedable up to 45% with the credit score and reserve requirements in the Eligibility Matrix, and a maximum allowable DTI ratio of 50% for loan casefiles underwritten through Desktop Underwriter, Fannie Mae Selling Guide B3-6-02. Prepayment penalties permitted only on a qualified mortgage with a fixed rate that cannot increase after consummation and that is not a higher-priced mortgage loan, only during the first 36 months, capped at 2% of the amount prepaid in the first two years and 1% in the third year, with a comparable no-penalty alternative required to be offered, 12 CFR § 1026.43(g). Annual escrow account statement submitted within 30 calendar days of the end of the escrow account computation year and cushion no greater than one-sixth of estimated total annual escrow payments, 12 CFR § 1024.17. “Looking for the best mortgage: shop, compare, negotiate,” U.S. Department of Housing and Urban Development.

This article is for informational purposes only and is not intended to provide legal, financial, or tax advice. Rates, lender pricing, points, lock terms and program guidelines change frequently and vary by lender, borrower and property; confirm your figures with your Loan Estimate and your lock agreement, and consult a qualified professional about your situation. Figures shown are illustrative, are not a rate quote or an offer of credit, and are subject to change. Align Lending is an independent Michigan mortgage broker, NMLS #2041154.

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