What are the types of loans available?
Most loans can be categorized into three main types: fixed-rate, adjustable-rate and hybrid loans, that combine features of the other two. Fixed-rate Mortgage: A loan that has an unchanging interest rate over its term. Traditionally the most popular choice among homeowners, because it is easy to plan and budget for, and may help protect the homeowner from the effects of inflation. Adjustable-rate Mortgage (ARM): A loan with an interest rate that changes periodically to keep pace with changing economic levels. The interest rate for an ARM is tied to an index (such as Treasury Securities) that may rise or fall over time. ARM loans usually have caps that limit the interest rate from rising above a predetermined limit between adjustment periods (for example, no more than five percent a year) as well as a ceiling on how much the interest rate may increase during the life of the loan. Hybrid loan: A loan that combines the features of fixed-rate and adjustable rate loans. Consult your real es
