subject: Types of Mortgage Rates [print this page] Types of Mortgage Rates Types of Mortgage Rates
There are various mortgage rates available for customers to select from but each of them is subjected to their respective advantages and disadvantages. The rates are generally depending on the type of loan and the loan tenure. Basically there are three types of rates, namely adjustable mortgage rate, variable interest rate and fixed interest rate. There are several companies that offer the act of refinancing but involve acquiring a new loan on an already owned property, which is usually done to substitute the current loans against the property. The best time to perform refinancing would be during the rates are relatively low.
The most common interest rates are the adjustable fixed rate mortgage and the adjustable mortgage charges. Fixed rates offer a permanent amount of payment amount every month and also a fixed principle for interest throughout the whole duration of the loan. The interest rates will remain as agreed as long as the borrower signs up for a fixed tenure agreement. The greatest advantage for such mortgage policies is that borrowers can clearly keep track of the exact payment amount to manage their financial budget easily.
Another benefit of engaging in a fixed rate mortgage is protecting you against the interest rate increment. As you may not know or predict the fluctuations of the mortgage rates, deciding upon a fixed rate would save you much hassles and prevent from flow of rate rising and falling. On the other hand, the adjustable rate mortgage has the interest rates adjusting from time to time. This is done according to the index basis where the interest rates rely on the flux of the market rates. Should there be a downward fluctuation of mortgage charges, it is better to engage yourself in the adjustable mortgage rates. For instances, there are phenomenon where the adjustable rate is way lower than the fixed rate mortgage. If such circumstances take place, it is advisable that you apply the ARM rate for mortgage as the monthly payment would become fairly lower.
