Mortgage : Home Loans : Refinance : Home Equity Loans

By Connie Barker

When you are searching for a mortgage, no matter if it is a first, second, or refinance, you have different options on repaying it which some people don’t realize. So, before you just take whatever is on the paperwork, you should consider the following options:

Capital and Interest Payments

This is the most common way to repay your mortgage, since you make your payments each month on the capital, or principle, of the loan. In the U.S., this is called amortization and in the U.K., this is called a repayment mortgage. These types of loans are set anywhere from 10 to 50 years, depending on the lender and where you live. The payments that you give to the mortgage company each month take a percentage and place it toward the interest and the rest goes toward the capital of the loan. Earlier in the loan, most of the payment goes toward the interest and toward the end most of the payment goes to the capital.

Interest only repayment.

While this type of mortgage is not widely used in the United States, it is in the UK. Basically, in this type of mortgage, the capital isn’t repaid through the term of the loan, instead, you make regular ‘payments’ to an investment account or plan that helps you to build up a large lump sum that will in turn repay the mortgage completely at the end of the loan. This is usually referred to as an

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For additional Mortgage Refinancing information
and resources visit Mortgage Refinancing.
(http://www.refinance-refinance.net)
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This entry was posted on Sunday, July 16th, 2006 at 4:40 am and is filed under Refinance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.