Blog, Educate Yourself
Common Home Loan Types
March 20, 2009 by Mortgage Align · Leave a Comment
There are various types of home loan for the property owners. Some common loans are:
- The interest rate of these loans depend upon the financial index it is dependent upon and so after a fixed rate of interest for few years it starts to vary for the rest of the term.
- Fixed Rate Mortgage:
- These loans have a fixed interest rate for a particular period of time. So your budget can be calculated as the monthly installments remain constant.
- Balloon Home Loan:
- This type of loan is repayable in the full amount when the term gets over. Generally a loan with the term of 5 to 10 years with a low rate of interest as found in ARMs loans.
- Home Equity Loan:
- These fixed rate loans are taken on the equity that your property is valued at. They provide you with liquid cash so as to invest, renovate, education purposes. They have a fixed monthly payment and are basically safe.
- Line of Credit:
- A line of credit loan allows you to take cash on the mortgage. You can cash on the equity of the house. The monthly installments are of low interest. The advantage is that you can pay it back when you want.
