There are different
types of mortgage loans in Montgomery AL. When you decide to buy a
home, at that time, you have the need to know what type of mortgage
loan is right for you.
Fixed Rate Mortgage
Loan
The interest rate in
this type of loan remains unchanged throughout the whole life of the
loan. It means the tax payable on the loan remains constant. This
gives some level of confidence to prospective homeowners, i.e., if
interest rates in this type of loan go up, their loan will not be
affected. But, there is also a drawback of this type of loan, i.e.,
if there is a fall of interest rates, they have no advantage of it.
Varying Rate
Mortgage Loan
In this type of loan,
for the first period or for the first year, interest rates are
agreed. It keeps on changing for the remaining years in accordance to
the reference rate which is agreed in the contract, adding a spread
that varies based on the conditions which are set out in the terms of
the agreement.
Joint Interest
Mortgage Loan
The interest rate in
this type of loan is kept fixed for two or more years combined. This
is followed by another period in which it is variable and is adjusted
in accordance to the prevailing conditions in the market.
Flat Fee Mortgage
Loan
This type of loan is
characterized by a flat rate. It closely appears like the fixed-rate
mortgage
loans Montgomery AL which considers the fact that the
customer always pays the same rate regardless of changing the
interest rates. The big difference is that if interest rates go up,
instead of the borrower paying more fees, the period of repayment is
extended and if there is a fall of interest rates, the period of
repayment is shortened.
For more detail visit
here @ www.riverbankandtrust.com.
No comments:
Post a Comment