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Vital Things To Know About Mortgages

By Arnold Ward

Mortgages are wonderful little financing options that give us the opportunity to make large purchases of homes. Unfortunately, if you do not do the proper research and evaluating, you may find yourself in deep trouble.

If you do not already know what a mortgage is, it is a loan specifically used to purchase a house or other piece of real estate property. It is almost unheard of to get a mortgage without a down payment, so be prepared to make one. Always remember that the higher down payment you make the less money you will have to pay each month.

Of course, you will also need to look at the interest rate when determining which mortgage to go with. These are usually based on the federal government’s set rates, but they can vary depending on certain issues. In order to get the right type of mortgage, you need to understand the difference between a fixed and adjustable one.

If you choose a fixed rate mortgage you will pay the same interest rate throughout the period of your mortgage. If the federal rate rises then this is a good thing, but when it drops this can be bad as your rate doesn’t change.

These types of interest rates are commonly only available for extended periods of time. Such as fifteen to thirty years. Just keep in mind that the more number of years you take to pay it back, the higher interest you will be paying in the end.

The interest rate on an adjustable rate mortgage fluctuates as the interest rate changes over time. After the initial phase of the loan, the interest rate could change on a regular basis, according to the details of your mortgage agreement.

A “balloon” mortgage will offer lower interest rates for a certain amount of time, often around 5 to 7 years, after which time a “balloon” payment is due which will pay off the mortgage. Although some people consider these loans to be risky, they are a good option under some circumstances.

Before you can consider either of these two, you need to get approved. Criteria such as debt-to-income ratio and any credit history you have will all be important when seeing if you qualify.

The author has been publishing commentary on personal finance for the previous three years. Furthermore, this writer loves writing on NYC real estate, like Beekman Place apartments in addition to Flatiron apartments.

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Article Citation
MLA Style Citation:
Ward, Arnold "Vital Things To Know About Mortgages." Vital Things To Know About Mortgages. 3 Jul. 2010. uberarticles.com. 8 Apr 2015 <http://uberarticles.com/real-estate/vital-things-to-know-about-mortgages/>.

APA Style Citation:
Ward, A (2010, July 3). Vital Things To Know About Mortgages. Retrieved April 8, 2015, from http://uberarticles.com/real-estate/vital-things-to-know-about-mortgages/

Chicago Style Citation:
Ward, Arnold "Vital Things To Know About Mortgages" uberarticles.com. http://uberarticles.com/real-estate/vital-things-to-know-about-mortgages/


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