Home Mortgage Resources
Fixed Rate? Adjustable Rate? Balloon/Reset? How do you choose what mortgage refinance is right for you. The types of mortgages
are explained below followed by resources to mortgage refinance leads and mortgage related web sites.
Fixed-Rate Mortgage: Fixed-rate mortgages are stable and offer long-term savings. Because the interest rate never changes, the monthly principal and interest payment never changes either.
Adjustable-Rate Mortgage: Also known as a variable-rate loan, usually offers a lower initial rate than fixed-rate loans. The interest rate can change at specified time periods based on changes in an interest rate index that reflects current finance market conditions, such as the LIBOR index or the Treasury index. The ARM promissory note states maximum and minimum rates. When the interest rate on an ARM increases, the monthly payments will increase and when the interest rate on an ARM decreases, the monthly payments will be lower.
Balloon/Reset Mortgage:A mortgage with monthly payments based on a 30-year amortization schedule and the unpaid principal balance due in a lump sum payment at the end of a specific period (usually 5 or 7 years) earlier than 30 years. The mortgage contains an option to reset the interest rate to the current market rate and to extend the maturity date provided certain conditions are satisfied.
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