Types of Mortgage
Mortgage refers to a loan that you get from a mortgage dealer such as a bank or a building society for a real property whereby the real property is held as the security to the loan till completion of the loan. With desire for good homes, it’s becoming almost impossible to have one without getting a mortgage. There are a number of things that people consider when taking a mortgage such as the interest rates, type of mortgage, fees, and the flexibility. To a great extent such factors influence the overall cost of the loan and the duration by which it will be completed. The type of mortgage whereby you are required to pay a constant interest rate for a certain period of time is referred to as a fixed rate mortgage. The extent of the duration by which your rates will be fixed can vary from one mortgage dealer to another or due to other factors such that when you are going to apply for the mortgage you might be told it’s a full fixed rate meaning till completion your rates will be constant or it might be fixed for a certain period of time maybe a year or two then from there you can change or remain with the same rates. With a fixed rate mortgage,you are able to make precise budget and make your plans for repayment with surety. There are various types of a variable rate mortgage and usually their rates can change at any time. One type of variable mortgage is hybrid ARMs which kicks off with a fixed rate and later changes to a variable rate mortgage. Government insured and conventional loan is another category for understanding the various types of loans. When you take a conventional loan it means that the government hasn’t secured your loan. There are varied forms od the government insured mortgage. In an annuity mortgage, the you are going to repay every month a certain portion of the loan amount plus the monthly interest rate. The loans usually have a time frame by the end of which it is supposed to be fully paid hence the monthly repayments are structured in a way that ensures that it will be fully paid. For you to understand exactly the type of mortgage exactly that you are going to be applying for, it is essential to consult the people who are giving you the loan so that you can be able to understand what you are about to do. One sure thing without doubt is that mortgage will help you own a home in an affordable and convenient way.