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Home Mortgage Loans

Written by Rachel Arieff
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Home mortgage loans come in different packages. The two main types are fixed-interest and adjustable-rate mortgages. Fixed-rate mortgages involve monthly payments of the same amount every time. Adjustable-rate mortgages are determined by the current interest rates, and can fluctuate depending on the economy.

Fixed-rate home mortgage loans are conventional loans, commonly for 15 or 30 years. Choosing a 30-year mortgage will allow you low monthly payments at a fixed schedule. A 15-year fixed-rate mortgage will have your home paid off in half the time as a 30-year mortgage, with half the interest, but your monthly payments will be higher.

Other Types of Home Mortgage Loans

Another type of fixed-rate home mortgage loan is the biweekly mortgage. With this loan plan, you pay half the monthly amount every two weeks. In this way, you shorten the loan term from 30 years to 18 to 19 years, paying off the home that much sooner.

New home loans can also take the form of adjustable-rate mortgages, or ARMs. The advantage of these loans - or disadvantage, depending on the economy -- is that you pay whatever the current interest rate is at the time. If the rates stay low, you'll save money, but if they rise, you'll pay more, which is why adjustable-rate home mortgage loans are a more risky endeavor.


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