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Mortgage
Types
Any
mishap with your mortgage can cause you a loss of thousand dollars.So
when you decide on what type of mortgage you are going to choose you
have to shop around and find the best deal.
Types
of mortgages
Fixed
rate mortgage
This
mortgage type is the most traditional mortgage.The interest rate
remains the same through out the term period.In this mortgage type
the monthly payments will remain the same and hence the borrower will
be at peace.
Adjustable
rate mortgage
This
mortgage type has a fluctuating interest rate.it depends on the
market index.The monthly payment increases or decreases depending on
the rise or fall of the interest rate.
Interest
only mortgage
In this
mortgage type the borrower pays only the interest and his principal
remains the same
Graduated
payment mortgage
It is
commonly known as GPM.In this mortgage type the borrower will be
expected to pay less monthly payments initially but over a period of
time his monthly payment increases.
Negative
amortization mortgage
In this
mortgage type the principal increase as the interest for that
specific amount is not paid.The balance interest rate piles up with
the principal and the principal amount of the loan increases.Here the
principal remains untouched adding up some interest too to it.
There
are further more mortgage types like capped mortgage,cash back
mortgage etc. |
