Fixed-Rate Mortgage

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.

Hybrid Mortgage

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

Balloon Mortgage

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

Adjustable Rate Mortgage (ARM)

Business / Loan / Adjustable Rate Mortgage (ARM): A loan with an interest rate that changes during the term of the loan. The payments generally increase or decrease with the interest rate. Rate is based on one of several 'index' options. MORE

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