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Three Common Mortgage Types

by Rob Stahura

A former telemarking executive, Rob Stahura currently works in partnership with Sunrun, selling solar panels to homeowners in Las Vegas. Recently, Rob Stahura also has entered the mortgage field and focused his efforts on building a nationwide mortgage firm.
When considering buying a house, a commercial business, or other types of real estate, know the pros and cons of different mortgage types to ensure the loan vehicle you choose fits the particular property and situation.
Adjustable-rate
During the life of an adjustable-rate mortgage, payments may fluctuate up or down depending on the loan’s index performance. Some adjustable-rate mortgages cap the amount payments can increase or decrease, although the rates of initial payment periods are almost always lower than a fixed-rate mortgage.
Fixed-rate
One of the oldest types of mortgages, fixed-rate mortgages ensure the interest rate will stay the same during the entire mortgage period, regardless of market fluctuations. An amortized option, which means every monthly payment will be the same even if each payment may cover a different ratio of interest and principal, fixed-rate mortgage terms can be as low as 5 years or as high as 50 years, depending on the lender and the buyer’s credit.
Interest-only
An option for individuals who intend to sell a property relatively quickly after purchase, interest-only mortgages allow the buyer to pay only the interest for the first 5 to 10 years. After that period, payments increase to include the loan’s principal amount in addition to any accrued interest.                            
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