Adjustable vs. Fixed Rate Mortgage Loans

When it comes to mortgage loans, there are two primary kinds – adjustable-rate mortgages (ARMs) and fixed-rate mortgages (FRMs). The “adjustable” and “fixed” parts of the mortgages refer to the interest rate. As the name suggests, an adjustable-rate mortgage has an interest rate that can fluctuate over the life of the loan. On the other hand, a fixed-rate mortgage’s interest rate doesn’t change during the loan.

Fixed-Rate Mortgages

While there are fixed-rate mortgages that have the same or “level” payments throughout the loan, there are also some with payments that increase or decrease over the years. Mortgage payment is split between interest on the loan and the cost of the home, or principal. In the first years of a fixed-rate mortgage, most of the monthly mortgage payment goes toward the interest. As the years pass, more of the payment goes toward principal and less toward the interest. Continue reading

A mortgage loan – savior or plague?

Mortgage loans are a type of secured loan which uses a person’s home as collateral. Considering that the price of a moderate house can be about $350,000 it’s very unlikely that a family will purchase their home in one full payment. For most people this would mean saving money for years and years and paying rent while they finally have enough to make the purchase. How old would they be by that time? Over 50 for the average American.Clearly this is not an option people will choose, thus the mortgage loans came to existence.

What’s good about mortgage loans? They let you buy a home when you can’t afford it and also save you the money you would pay for rent if renting. Continue reading


Some external resources which offer good information related to mortgages, secured loans, unsecured loans and other personal finance related subjects. – Property news, analysis, insights, advice on buying investment property for capital growth or rental income