Aren't there really just two kinds of mortgages: fixed and adjustable rate?

 

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“Are’nt there really just two kinds of mortgages: Fixed and Adjustable rate?”

You could say that, because all mortgages fall into one of these two categories -- that is, the interest rate you pay is either the same (fixed) for the life of the mortgage, or it can change (adjust) over the life of the mortgage.  First fixed-rate mortgages- with this type of mortgage your monthly payments for interest and principal never change.  Property taxes and homeowners insurance may increase, but generally your monthly payments will be very stable.  Fixed-rate mortgages are available for 30 years, 20 years, 15 years and even 10 years.  There are also "bi-weekly" mortgages, which shorten the loan by calling for half the monthly payment every two weeks.  (Since there are 52 weeks in a year, you make 26 payments, or 13 "months" worth, every year.)   Next there are Adjustable-Rate Mortgages or ARMS. These loans generally begin with an interest rate that is 2-3 percent below a comparable fixed rate mortgage, and could allow you to buy a more expensive home.   However, the interest rate changes at specified intervals ( for example, every year) depending on changing market conditions; if interest rates go up, your monthly mortgage payment will go up, too.  However, if rates go down, your mortgage payment will drop also.  There are also mortgages that combine aspects of fixed and adjustable rate mortgages - starting at a low fixed-rate for seven to ten years, for example, then adjusting to market conditions.  Ask your mortgage lender about these and other special kinds of mortgages that fit your specific financial situation.   The loan professional that has made this information available to you specializes in assisting those individuals with obtaining a home loan whether for purchase or refinance.  Your loan professional in most cases can advice you on the best approach and help you with your specific loan requirements.