Mortgage loans come with a menu of payment options, with the most popular being fixed and adjustable rate programs. Each option has its advantages and disadvantages, and the one that works best for you depends upon your financial situation.
A fixed rate mortgage is one in which the loan is repaid in equal payments within a certain time frame. Most fixed rate mortgages have paybacks of fifteen or thirty years. The advantages of this type of mortgage are that you
- know what the payment is from month to month, and
- can track your growing equity by using an amortization schedule and see how much of your payment goes to interest and how much to principal.
Fixed rate programs are still the most popular way to buy a home because of their predictability.
Mortgage loans come with a menu of payment options, with the most popular being fixed and adjustable rate programs. Each option has its advantages and disadvantages, and the one that works best for you depends upon your financial situation.
A fixed rate mortgage is one in which the loan is repaid in equal payments within a certain time frame. Most fixed rate mortgages have paybacks of fifteen or thirty years. The advantages of this type of mortgage are that you
· know what the payment is from month to month, and
· can track your growing equity by using an amortization schedule and see how much of your payment goes to interest and how much to principal.
Fixed rate programs are still the most popular way to buy a home because of their predictability.
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Written by Lawrence
Topics: House