When your Flex-Term fixed rate mortgage closes, you’ll start making monthly payments based on the interest rate and the principal loan amount.
As with a traditional 30 or 15-year fixed rate loan, each monthly payment will pay down a portion of your loan balance. As time goes on and your payments lower the balance of your loan, the total cost of interest will also go down. As a result, an increasingly large proportion of your monthly payment will go towards the loan’s principal.
Typically, the shorter the term of your mortgage, the higher your monthly payments will be and the less you’ll pay in interest (and vice versa).
For example, assuming all else is equal, you’ll pay more interest over the life of a 25-year fixed rate mortgage than you would over the life of a 10-year fixed rate mortgage.
To be approved for a flex-term fixed rate mortgage you’ll need a minimum FICO® score of 620, a minimum 3% down payment, money to cover closing costs, and a debt-to-income ratio of no more than 50%
