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Fixed Mortgages
Fixed rate mortgage interest rate and the
monthly payment is always fixed for the duration of
the mortgage loan. Some of the common mortgage terms
are 10, 15, 20, and 30 years. In the recent years
some lenders have been offering terms that are amoritized
for 40 and 50 year mortgage terms.
Adjustable Rate Mortgages
Adjustable rate mortgage interest rate is
fixed for an agreed period of time. After the expiration
of this time, it will periodically adjust upwards
or downwards according to market index levels. Those
indices include the Prime Rate, the London Interbank
Offered Rate, and the T-Bill (Treasury Index).
Mortgage Borrower's : Good Credit / Bad Credit
Game
Lenders refer to the borrowers' credit reports and
credit scores when approving a mortgage application.
The better (higher) the score, the better rates a
borrower can obtain. Lower credit scores, however
mean higher risk to the lender, therefore mortgage
lenders will require higher interest rates in order
to compensate for the increased risk.
Baloon Type Mortgages
A balloon, or partial amortization loans are the
ones in which the mortgage monthly payments are calculated
over a certain period of time. The outstanding principal
balance is payable at by the end of the mortgage term.
This type of payment of the principal is also called
a balloon payment. A balloon mortgage loan can either
be of fixed or an adjustable interest Rate.
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