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. When considering a mortgage there are various factors that influence the decision you make such as the type of mortgage, the fees, interest rates, and flexibility. Such factors are of importance since they largely influence the duration of completion of the loan payment and also the total cost of the loan. One type of mortgage is a fixed rate loan whereby you will pay will pay using a constant interest rate for the given period of time. For a fixed rate mortgage, it might be fixed for the whole period till completion but in other cases it will be specified like maybe a fixed rate for one or two years then from there terms might change, hence it’s important to know for how long your rates will be fixed. The greatest advantage of a fixed rate mortgage is the fact that you are able to make an exact budget since you are sure sure of the rates. Another type of mortgage based on the interest rates is a variable rate mortgage which comes in different types but one common thing about them is that the 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. After visiting the fixed rate and varied rates mortgage you might also need to decide whether you need a government insured loan or a conventional loan. A conventional loan is not in any way guaranteed by the government. There are varied forms od the government insured mortgage. One of the most popular type of mortgage is annuity mortgage whereby you pay the monthly interest rate and a certain portion of the loan amount. The amounts to be payed monthly are well planned so as to ensure that the loan is fully paid by the end of the of the designed time plan for repayment. Before taking on any type of loan, ensure that you understand every term and condition and also your lender any questions to clear your doubt so as to be make a clear plan of your repayment and for your satisfaction. With a mortgage you are guaranteed of owning a home in an affordable and convineniet way.