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Often, adjustable rate mortgages are advertised with extremely low interest rates, which will be in effect for a short period of time. When introductory period is over, mortgage rate will rise to its normal amount.
Choose an adjustable rate mortgage when you have secure income that is likely to increase along with economy. It's a good mortgage when interest rates are stable, or if signs suggest that they're about to fall.
A balloon mortgage is often a last resort for home buyers who can't qualify for more traditional loans. The balloon mortgage has a fixed interest rate and monthly payments for a specific amount of time. At end of that time, entire loan comes due - hence name 'balloon'. In practical terms, a balloon rate will give you a fixed monthly payment for several months. After that, you'll essentially have an adjustable rate mortgage.
Choose a balloon mortgage loan for substantially lower initial rates, or if your credit limits other types of mortgage that you can apply of qualify for.
Now that you understand your options for mortgage loans, donít forget to shop around! The interest rates and fees can vary wildly from lender to lender, so make sure that you get best deal that you can!
To see a list of recommended mortgage loan companies online, visit this page: http://www.abcloanguide.com/mortgageloans.shtml - Carrie Reeder is the owner of ABC Loan Guide, an informational website with articles and more about various types of loans.