Explanation of Mortgage Types - Fixed Rate Mortgage

The basic mortgage has always been the 30 Year Fixed Mortgage. With this type of mortgage you get an interest rate that stays the same (fixed) for the entire length of the loan. What this means is that you can count on paying the same monthly mortgage payment for the next 30 years without any "surprise" increases in the amount. You know what your mortgage payment will be each month and you can make your budget accordingly. There are now 15, 10 and even 5 year fixed mortgages but they come with a hefty monthly payment.

Explanation of Mortgage Types - Adjustable Rate Mortgage Loan

Another mortgage loan type is the Adjustable Rate Mortgage Loan or ARM. This type of loan adjusts to the fluctuations in the interest rate that is determined by certain mortgage forecasting indexes. The interest rate of this loan is initially lower than the fixed rate loan but after the introductory period the loan then begins to fluctuate. This is a good loan when interest rates are low but can be burdensome when interest rates are high. One disadvantage of this loan is that you cannot predict exactly the monthly payment because it is subject to change.

Explanation of Mortgage Types - Convertible Mortgage Loan

Convertible Mortgage Loans are another type of mortgage. This is a kind of hybrid of the fixed and adjustable mortgage loans. This is a popular loan because it has flexible mortgage loan options; when rates are high you can convert to the fixed rate loan and when the rates are low you can convert back to the adjustable rate loan. This loan has other names such as Reducing Interest Mortgage, Reducing Interest Loan, Reduction Option Loan, etc.

Explanation of Mortgage Types - FHA and VA Loans

The final two mortgage loan types are for special social categories. The FHA Loan by the Federal Housing Authority guarantees the repayment of loans made by private lenders to low and moderate-income level populations. The VA Loan by the Veterans Administration guarantees the repayment of loans made by private lenders to qualified veterans who have served in the United States Armed Forces and the National Guard.

This is just a simple basic overview of the mortgage loan types available today. With the above information you must now begin to get much more extensive information on the specific loan that fits your particular situation best. The Internet is your best source for finding out this information because it allows you to make comparison rate shopping very easily.

The Internet is also the best resource for finding a lender with whom you can do business. Be sure to have an in depth discussion with your lender about the particular loan you are getting before you sign any papers binding you to a contract. Remember, never sign a contract if you any doubt about the terms of the mortgage agreement that is presented to you.

Get the best Free information on mortgages at Home Mortgage Loans Remember, visit http://www.Best-Mortgage-Lenders.com only if you want expert advice on all things mortgage related.

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