NEW YORK, Jan. 10, 2013 /PRNewswire-iReach/ -- When you take advantage of RealtyPin.com's Mortgage Center, you're going to come across a variety of different mortgage options. But what do they all mean? And are they really all just variations of one another? Nope! Luckily, these 3 types are completely different from each other. So, no matter what kind of budget you're dealing with – and no matter what kind of spending options you're comfortable with – you'll be able to find something that appeals to you:
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1. A fixed mortgage
Are you the kind of person who likes things "just so"? If you hate flying by the seat of your pants, you'll love a fixed mortgage. After all, these mortgages never change! From the day you sign on the dotted line to the day you pay the last cent off (whether that's 15 or 30 years from now), the interest rate will stay the same. So, you'll be able to calculate exactly what your payments are going to be for the next few decades. It doesn't get more stable than that!
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2. An adjustable mortgage
If you've been paying attention to mortgage rates at all over the past year, you've seen that they've been going down, down, down. If you want to take advantage of that – and save yourself some valuable money – you'll love an adjustable mortgage. That's because these mortgages adjust along with current rates (after an introductory period that usually lasts for a few years). So, when rates go down, so will your monthly payments. Unfortunately, though, when rates go up, so will your monthly payments. If you're a risk taker who wants to save some money, an adjustable mortgage may be the perfect bet!
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3. An interest-only mortgage
If you're looking for a way to keep your monthly payments as low as possible, an interest-only mortgage may be the best way to do it. But what exactly does that mean? Like the name suggests, on these loans, you're only responsible for paying the interest on your mortgage every month – instead of the principal AND interest that all other loans require. You won't get to do this forever (obviously!), but most interest-only mortgages will let you do it for the first 5 or 10 years of your loan. What's the point? If you want, you can take the money you're saving each month and put it in an interest-bearing savings account. That way, you can use your money to MAKE money. Then, when it comes time to start paying off your principal, you'll have plenty of money to do it. (Many first-time buyers do this to build up their savings, especially after paying a big down payment.) Just bear in mind – if you're only paying off interest, you're not building any equity in your home. So, that's a big factor to consider before you sign on the dotted line!
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