urrently on the market, mortgage loan is you have to
there are many varieties of repay more for your mortgage loan
mortgage loans available. in total compared to someone who
Sometimes it can be difficult to takes up a 15 or 5 year loan.
tell which mortgage loan is
suitable and applicable to you. There are also shorter time
periods such as 5 year, 10 or 15
I will discuss the 3 main types years fixed mortgage loans. It
of mortgage loans on the market. allows people who want to pay off
Most banks and lenders offer their house in a shorter period
mortgage loans that belong to one of time. Of course, you have to
of these categories. make sure you have the financial
capability to repay higher
1. Fixed Mortgage Loan monthly repayments.
Fixed mortgage loans are the most There is also another
popular and common among the sub-category of mortgage loan
three types of mortgage loan. called adjustable rate mortgage
loan or ARM. Usually, you will
You take out a mortgage loan with start off with a lower interest
a lender and you pay a certain rate compared to a 30 year fixed
repayment amount for a fixed mortgage loan. So you ended up
period of time. Most people paying less each month for your
usually choose 30 year fixed mortgage repayment.
mortgage loans as the monthly
repayment amounts are low and the However take note that ARM is
interest rates usually evens out highly fluctuating depending on
in a 30 year period. interest rates. In other words,
you pay less for monthly
One disadvantage of 30 year fixed repayment when interest is low
and pay more when interest rates of years, usually 5 or 7 years.
is high. At the end of that period, you
will need to repay the loan in
2. Convertible Loans one lump sum.
Convertible loans are becoming So what’s the advantage of a
more popular as it allows people balloon loan? It is mostly used
to keep their mortgage loan by investors or property dealers
options open allowing for more who are looking to sell the house
flexibility. in a short period of time. They
can take advantage of low
If you find interest rates are interest rates without locking
too high, you can convert to a their money on a house. Since
fixed rate mortgage loan. If they will have a large sum of
interest rates are low, you can money when they sell the house,
also convert to ARM based it will not be a problem to
mortgage loans. return the lump sum.
There are too many varieties of 3. Special mortgage loans
convertible loans under this
category. However I list one type These are mortgage loans that are
of convertible loans I dealt only being offered to a group of
with. people. For example the FHA
mortgage loans are only available
Balloon Loan for first time home buyers or
people with bad credit.
A balloon loan is a fixed rate
convertible loan. Usually, you Another one is the veteran
start off by repaying small affairs mortgage loan. They are
monthly repayments for a period only offered to widows of the US
armed forces. professional mortgage consultant
before you decide to take up any
The best way to know whether you mortgage offer
qualify or is suitable for a
mortgage loan is to speak to a
About the Author:
Ricky Lim works in a finance company specialising in Home mortgage refinance loans. Visit his site to find the best home mortgage loan.
Read more articles by:
Ricky Lim
Article Source: www.iSnare.com 
