Buying a house is a major step for anyone, and also a considerable responsibility. Homes are well known for being huge investments, but there are options to make home ownership feasible and hassle-free. Banking services can go a long way for a person’s personal finances, and once a prospective buyer has everything in line, he or she is ready to purchase the right home and handle a mortgage on it. Car mortgages are another financial route toward making big purchases without a headache. What is a fixed rate mortgage? What can one do with a checking account? What mortgage is right for me? These questions can be made easy to answer.

A Bank and You

Any responsible adult is bound to have a bank account with everything already set up, and for younger adults, getting one’s first bank account is a good foundation for financial responsibility. Features such as mobile banking and mobile deposit options can make banking very convenient.

Different banks have varying features, according to Wallet Hub such as online banking fees, monthly service charges, ATM card fees, minimum balance requirements, and overdraft protection, among other features. Once a bank with the right features is chosen, a young adult can gather and present personal ID such as a social security card, birth certificate, and state-issued photo ID, as well as proof of address like a utility bill. An opening deposit of varying dollar amounts will be needed, then an application is filled out and account documents are signed. Online banking allows an account owner to manage their finances on the Internet, whether through PC or a smart phone, and this is another incentive to start a bank account with Internet services.

Once all this is done, a young adult is prepared to start saving. After all, according to a recent study, 32% of Americans aged 53 to 62 reported having no savings at all, but a young adult has the time to start saving and get a stockpile of money ready, as well as credit. Then, for home and car purchase, it is time to ask questions such as: “What is a fixed rate mortgage?”

Mortgage Fundamentals

A mortgage is the money a buyer borrows from a bank or mortgage lender for purchasing a house, while the creditor owns the house and the debtor pays the mortgage back plus interest and taxes. The actual loan’s total is the principal, which is paid back along with the interest and taxes. Sometimes, mortgage rates fluctuate (often having a cap) month to month, but other times, they are steady. That begs the question: what is a fixed rate mortgage?

According to Bankrate, a fixed mortgage is one whose interest rate remains the same month to month, and the principal and interest payments are fixed. The taxes, though, may still change from month to month. These types of mortgages are popular because the predictability make personal financing easier.

A fixed mortgage can last either 15 or 30 years. For the 15 year version, the total interest is lower, but the monthly payment is higher. The opposite is true for a 30 year mortgage: more is paid in interest by the end, but the monthly payments are lower than those in a 15 year plan. Buyers with solid cash flow can choose the 15 year plan, since they want to pay it off faster and can do so, while others choose the 30 year plan so they can save other money month by month for other needs such as emergency savings.