Mortgage Loan is a bit different kind of loan from all the others loan you would have heard about or have taken. The rate of interest remains same in the Mortgage loans which vary in other types of loans according to market.
Mostly the Mortgage loans are being initiated for a time period of 10 years. Remind you that the rate of interest for the mortgage loan will remain same throughout the period of 10 and will not vary with ups and downs in the market (The only exception to this would be a line of credit, in most cases. The interest rate on a line of credit may be changed over time.) In general, you can finish off the mortgage loan by paying the remaining amount at a time before committed, although you may pay a penalty depending on the mortgage lender.
Most of us are familiar with this kind of loan through the purchase of our vehicles.
With each mortgage, there are certain things like the length of the mortgage, the term of the mortgage and the mortgage interest rate which are negotiated separately. Actually they may be understood better in the following ways:
Most of us are familiar with this kind of loan through the purchase of our vehicles.
With each mortgage, there are certain things like the length of the mortgage, the term of the mortgage and the mortgage interest rate which are negotiated separately. Actually they may be understood better in the following ways:
- “Amortization” of the mortgage is the length of time it will take to pay off the mortgage.
- The term of the mortgage refers to the time period covered by your current mortgage contract. This is the length of time that you are “locked in” to a particular interest rate and payment amount.
- The rate of interest can either be fixed or variable as per your choice.
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