Jan 17 2008
Mortgages-Know about its types
Mortgages are very common and useful if you want to purchase a new property or residence and need a loan for it. These are usually long-term loans that you may obtain from any mortgage broker or bank. There are various types of mortgages and each has its own set of benefits and risks. They are:
- Fixed rate mortgages - They are the most common type. They keep the rate of interest constant throughout the duration of the loan. This in turn makes the monthly payment same as well. The normal duration to clear such loans is between 15 to 30 years.
Adjustable rate mortgages - usually commence with relatively lower rates of interest. These may rise considerably over a period of time and you may end up paying more than you had expected to. These are available with caps to prevent astounding increase of rates.