| When beginning your quest for a home of your own | | | | are), at around three and a half percent, that will mean |
| it's a good idea to learn all you possibly can about | | | | that a fifteen year mortgage based on a one hundred |
| mortgage loan transactions and how they apply to | | | | thousand dollar home expect to pay approximately |
| you. A mortgage is a promise to pay that typically is | | | | one hundred fifty five thousand total over that fifteen |
| carried out over a period of from fifteen to thirty years | | | | year period. Interest would amount to around thirty four |
| and involves the largest purchase of most peoples' | | | | thousand dollars, with the rest going toward taxes. |
| entire lifetime. | | | | If that same one hundred thousand dollar home and |
| Types of Mortgages | | | | same interest rate applies to a thirty year loan you can |
| It will pay to learn about mortgage loan differences and | | | | expect to pay around seventy two thousand dollars |
| which might be the best for your particular situation, | | | | just in interest on that one hundred thousand USD loan. |
| let's look at some typical types of home mortgages: | | | | What many do not understand about mortgage loan |
| - Fixed Rate Mortgages are the most common and | | | | "fine print" is the fact that borrowers pay, and pay |
| safest overall. The borrower agrees to pay the | | | | dearly for the ability to pay out that amount out over |
| amount owed over a period of from fifteen to thirty | | | | many years. |
| years at a set rate of interest. This interest rate will | | | | Borrowing is an expensive business |
| not change over the period of the loan so there are no | | | | To look at more realistic figures based on home prices |
| surprises and the monthly payment will only changed if | | | | today, lets say that home costs three hundred |
| and when taxes and insurance rates change over the | | | | thousand dollars and you pay nothing down (not likely |
| years. | | | | to happen when you learn something about mortgage |
| - Adjustable Rate Mortgage or ARM is a mortgage | | | | loan transactions). Buying that home at the same |
| which is easier to qualify for in most instances but is | | | | interest rate of three and a half percent over a thirty |
| somewhat more unpredictable because as interest | | | | year loan you can expect to pay about six hundred |
| rates change, so will the monthly mortgage payment. | | | | forty three thousand dollars for that three hundred |
| - Fifteen years versus thirty year mortgages can | | | | thousand dollar house. Interest would amount to |
| mean a huge amount of difference in the amount paid | | | | approximately two hundred seventeen thousand. |
| overall for that home. Fifteen year shaves off a | | | | However if that mortgage were changed to a fifteen |
| considerable amount and if that fifteen year loan is | | | | year and interest kept the same at three and a half |
| made in biweekly amounts it will further cut down in | | | | percent, you can expect to pay four hundred sixty five |
| the amount of interest paid. Learn all you can about | | | | thousand dollars or one hundred seventy eight |
| mortgage loan transactions before you make that big | | | | thousand dollars less in interest on that three hundred |
| commitment. Terms and interest rates | | | | thousand dollar home. So as you can see, it benefits |
| The interest rate currently offered by lenders will | | | | borrowers greatly when they learn all they can about |
| make a huge difference in the total amount paid for | | | | mortgage loan commitments. |
| your home. If interest rates are low (as they currently | | | | |