Types of mortgages
There are many types of mortgages, and the more you know about mortgages, the better.
Most people go for a fixed-rate mortgage, where interest rate stays at the same level for the term of the mortgage – normally over a 30-year period. The advantage of a fixed-rate mortgage is the borrower always knows exactly how much the mortgage payment will be.
Another kind of mortgage is an Adjustable Rate Mortgage, where interest rate and monthly payments usually start lower than a fixed rate mortgage. The rate and payment can move either up or down. The adjustment is tied to a financial index. The advantage of an adjustable Rate Mortgage is that the buyer may be able to afford a more expensive home.
There are several government mortgage programs such as the Veteran’s Administration’s programs and the Department of Agriculture’s programs.