Mortgage rates - 7 most common types

After the effects of the so-called sub-prime crisis, banks have significantly tightened their mortgage lending policies. This does not mean that mortgages are not granted, but that the requirements and guarantees that is now demanding much higher. That is why when a mortgage should take into account several issues.

One of the most important is to know that there are types of modalities, and each has its advantages and peculiarities. The more we know about the types of mortgages will be easier to organize. In times of crisis we must be prepared.

These are some of the most common mortgages:

• Fixed rate mortgages: These are the most stable and secure. The advantage is that we will be paying the same interest rate for the total term of the mortgage, which typically ranges between 20 and 30. Although the interest rate is usually higher, we can keep the monthly payments. Such mortgages are usually more successful when the economic situation is uncertain, as is the present.

• Adjustable Rate Mortgage: With this type pay less monthly while the interest rates remain low, but if these increases will also increase our mortgage. One advantage is that interest rates and payments in their first months or even years are usually lower than a fixed rate mortgage.

This allows you to calculate mortgages cheaper and afford a more expensive because the initial interest rate will be lower. The term is usually up to 30 years, although there are cases of institutions granted even approaches 40.

• Mortgage interest mixed: They define a fixed rate for the first years, as net income from the client and, over time, interest is fixed according to market fluctuations. This guarantees a time of stability in the years that we have fixed rate mortgage, often the more we appreciate it because of the economic effort that we make in buying the property.

• Mortgage Flat Fee or constant: In this mode the fee is fixed for the life of the loan or mortgage. The interest rate is fixed the same way as for the type of variable fee. The problem or advantage of these mortgages is that according to the agreed fee, the deadline may be either shorter or much longer than normal.

• Increasing Mortgages: The fee may be subject to a fixed growth rate, with growth rates indexed to CPI, etc. Are similar to those of similar flat fee, but its share is increasing, making the payback period is greater than a variable interest, comparative mortgages.

• Multicurrency Loan: This is a type of mortgage in which the loan or credit is requested in several currencies including the country where the firm. This mortgage is made in currencies that have a low interest rate compared to the local currency, such as the Japanese yen or Swiss franc, and whose stability is clear. Its main advantage is that we can change the currency from time to time.

• Bridging loan or mortgage: This is a rather curious form as the bank or financial institution makes a loan to us for our financing, and with the guarantee that it will enter later with interest, this can be confirmed in a mortgage dictionary on the web. The mortgage is for people who need to acquire a new property and also do not have time to sell the present home.

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