Mortgage Types in Baltimore, Maryland
Potential home buyers will find a number of mortgage types at their disposal in Baltimore, Maryland. However, in order to make a lucrative purchase, he/she needs to be up to date regarding the common types of mortgage they may encounter during the transaction:
In this type of mortgage, the interest may either be fixed throughout the loan or changeable at different time periods. It can also increase or decrease with time as well.
This kind of mortgage loan depends on a maximum term i.e. the duration (in years) during which an amortizing loan will be taken care of. Of course, some types may not have amortization or need to be paid in full at a certain time.
Some loan types might compel the buyer to limit their prepayment of either the entire or part of the loan. It might also require a penalty charge in case of prepayment.
FRM or Fixed Rate Mortgage and ARM or Adjustable Rate Mortgage
These are the main basic amortized loan types and are also known as floating rate or variable rate mortgages. In USA, fixed rate mortgages are typically availed but the floating type is also utilized sometimes. A combination of both is also used in which the mortgage loan possesses a fixed rate for a certain period of time and which changes at the end of the designated period.
Before applying for any mortgage, the borrower will need to check his/her credit score, down payments and assets to check whether he/she is eligible for the mortgage or not.
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