| Mortgage loan is the generic term for a loan secured | | | | This is commonly referred to as (self) amortization in |
| by a mortgage on real property; the "mortgage" refers | | | | the U.S. and as a repayment mortgage in the UK. A |
| to the legal security, but the terms are often used | | | | mortgage is a form of annuity and the calculation of |
| interchangeably to refer to the mortgage loan. | | | | the periodic payments is based on the time value of |
| Mortgage loans generally refer to a loan secured by | | | | money formulas. Certain details may be specific to |
| residential property, often for the purpose of acquiring | | | | different locations: interest may be calculated on the |
| the residence. Mortgage loans may be lower priced | | | | basis of a 360-day year. |
| than other forms of borrowing because the value of | | | | The main alternative to capital and interest mortgage is |
| the property reduces risk for the lender. There are | | | | an interest only mortgage, where the capital is not |
| many benefits of Mortgage Loans. | | | | repaid throughout the term. This way you can benefit |
| The first benefit of mortgage loans is that there are | | | | more from Mortgage loans. This type of mortgage is |
| many types of mortgage loans and are available and | | | | common in the UK, especially when associated with a |
| used worldwide. The flexibility of interest rates also | | | | regular investment plan. With this arrangement regular |
| adds to the benefits of mortgage loans. Here, the | | | | contributions are made to a separate investment plan |
| interest rates may be fixed for the life of the loan or | | | | designed to build up a lump sum to repay the |
| can be changed at certain predefined periods. The | | | | mortgage at maturity. This type of arrangement is |
| amount paid per period and the frequency of | | | | called an investment-backed mortgage or is often |
| payments; in some cases, the amount paid per period | | | | related to the type of plan used. |
| may change or the borrower may have the option to | | | | Another important benefit of Mortgage Loans is that |
| increase or decrease the amount paid. | | | | during your interest only period, your entire monthly |
| Another benefit of Mortgage loans is that there are a | | | | payment is tax deductible. Interest rates on mortgage |
| variety of ways in which you can repay a mortgage | | | | loans have record lower rates that can save you your |
| loan. The repayments may depend on locality, tax | | | | money. Interest Only loans offer lower payments. Yet |
| laws and prevailaing culture. The most common way | | | | another benefit of Mortgage loans is that interest rates |
| to repay a loan is to make regular payments of the | | | | are tax deductible and are also made with flexible |
| capital, also called principal and interest over a set term. | | | | options with fixed rate or ARM's. |