Page 15 - Book6E

calculated using the interest rate agreed upon, the amount of the loan, and the length or term of the mortgage. All fixed rate mortgages have an interest rate tied to an index, usually the prime lending rate.
Fixed-rate mortgages are the most classic form of loan for home pur- chasing in the United States. The most common terms are 15-year and 30-year mortgages, but shorter terms are available as well as long-term mortgages of 40 and 50 years. These
long-term loans are common in areas with high-priced housing, where even a 30-year term makes the monthly pay- ment out of reach for the average family.
Fixed-rate mortgages usually have higher
interest rates than adjustable rate mort-
gages, with long-term fixed-rate loans
at the highest interest rate. This doesn’t
mean that fixed-rate mortgages are worse
than adjustable rate mortgages. Generally, the fixed-rate mortgage will cost the borrower less over the term of the loan than an adjustable rate
Mortgage Loans
Don’t borrow money from a neighbor or a friend, but of a stranger where, paying for it you shall hear of it no more.
— Lord Burleigh
7