My firm handles real estate transactions regularly and clients often have questions concerning different kinds of mortgages. There are a few different types of mortgage loans currently being offered and each has it's unique benefits and drawbacks. Only you can decide what is right for your new home.
One of the most common types of mortgage is typically called a fixed rate mortgage. If you choose this type of mortgage, you will be charged a constant rate of interest for the entirety of the mortgage. Although the idea of a constant mortgage payment can be a comforting one, you should keep in mind these types of mortgage are usually associated with higher interest rates as a penalty for such security.
Another type of mortgage is typically known as a variable or adjustable rate mortgage. With an adjustable rate mortgage, your interest rate and payment will be the same for a specified period of time, perhaps five or six years, before fluctuating depending on the market rates. While this type of mortgage is considered more risky a fixed rate, it is important to keep in mind that there is a ceiling on your payment and that these types of loans often start with lower interest rates. Adjusted or variable rate mortgages can be ideal for people who are just starting out but anticipate steady increases in their salaries.
It is important to do your research before you decide to take on a loan the size of a mortgage. Before you do so, remember that an attorney can often times be useful in providing unbiased and accurate legal guidance. If you have any questions or concerns, you should consult a legal professional first.
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