A mortgage (often used synonymously with mortgage loan) is a loan borrowed against a form of real property such as a home or building.
There are different variables of a mortgage loan which include: the mortgage rates, the amount of the mortgage, the maturity date and the re-payment methods.
Most home buyers seek out a home mortgage loan because it is rare where an individual or family has enough savings or liquid assets to purchase a home outright.
The two types of mortgages include fixed rate mortgages (FRM) and adjustable rate mortgages (ARM), and some loans are a combination of the two.
With a FRM the mortgage rate stays the same for the term of the mortgage. With an ARM the mortgage rate will generally stay the same for a fixed amount of time, at which time it will periodically (annually or monthly for example) adjust in either direction based on current market rates.Powered by Sidelines