Different Kinds of Mortgages

Different Kinds of Mortgages

Nearly every homeowner is aware of what a mortgage is, but there are many people who have not yet ventured into the realm of home ownership, who know little about mortgages.

Those people, who have purchased homes of there own, often think of their mortgages in terms of one of their major expenses, and wisest decisions. They have acquired a loan in respect of which they have given the loan provider a mortgage on a property, usually their prime residence. Therefore, in its simplest form a mortgage is a loan secured on a property.

Fixed Rate Mortgage - Adjustable Rate Mortgage

There are many different kinds of mortgages, to suit personal circumstances, and/or investment intentions. Two common examples are fixed rate mortgages and adjustable rate mortgages, but there are numerous variations, which differ in the ways they are set up. With a fixed rate mortgage you can be sure that your repayments will remain the same for the period of the loan, but an adjustable rate mortgage fluctuates with market rates. It is more of a gamble, but is preferred by some borrowers for whom it has proved to be advantageous.

Buy To Let Mortgages
There have been an expanding number of investors, who have taken out different kinds of mortgages, to invest in properties that they do not intend to live in themselves. They participate in what has become known as the 'Buy to Let' market, whereby they purchase real estate to rent out to other people. They get a return on their investment from the rents they receive from their tenants. They may also hope to benefit from rising property prices, but that does not always materialize, and some buy to let investors have lost a lot of money.

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Different Kinds of Mortgages
Different Kinds of Mortgages