PasadenaGirl

There are several types of home mortgages:

· Fixed-rate mortgage-has a fixed interest rate over the term of the loan.

Commonly, people go for thirty ear loan; however the fifteen and twenty year loans are available as well. One of the benefits and advantages of fixed-rate mortgage is that the interest rate and monthly payment do not change over the term of the loan. If a current interest rate falls below your fixed rate, you can be “locked in” to a higher rate. In this case you may have to consider refinancing.

· Adjustable-rate mortgages (ARMs). This type of mortgage starts at the low introductory interest rate, and then gradually within one, three, five, seven years becomes fixed. The rate will adjust annually based on the pre-determined index.

The interest rate will rise on your home loan and monthly payments, and then fall with increases and decreases in overall interest rates. There is a term “interest rate cap”, which limits the amount by which the interest rate can change.

This type of loan is recommended for someone who is anticipating living in their home less than seven years.

· Down Payment. When you purchase a home, you are required to put a down payment of at least 20 percent, to avoid paying higher PMI (private mortgage insurance).

http://www.rmcfunding.com/loans/