Business / Taxes / Fixed-Rate Mortgage: A fixed-rate mortgage is a long-term loan that you use to finance a real estate purchase, typically a home. Your borrowing costs and monthly payments remain the same for the term of the loan, no matter what happens to market interest rates. This predetermined expense is one of a fixed-rate loan’s most attractive features, since you always know exactly what your mortgage will cost you. If interest rates rise, a fixed-rate mortgage works in your favor. But if market rates drop, you have to refinance to get a lower rate and reduce your mortgage costs. Typical terms for a fixed-rate mortage are 15, 20, or 30 years, though you may be able to arrange a different length. With a hybrid mortgage, which begins as a fixed-rate loan and converts to an adjustable rate, the fixed-term portion is often seven or ten years.
Business / Taxes / Hybrid Mortgage: Sometimes called an intermediate ARM, a fixed-period ARM, or a multiyear mortgage, a hybrid mortgage combines aspects of fixed-rate and adjustable-rate mortgages. The initial rate is fixed for a speci MORE
Business / Taxes / Balloon Mortgage: With a balloon mortgage, you make monthly payments over the mortgage term, which is typically five, seven, or ten years, and a final installment, or balloon payment, that is significantly larger than MORE