Mortgage Lenders and Their Mortgages
Today’s mortgage lenders have undergone sweeping changes in loan processing, appraisal practices and truth in lending requirements. The purpose of this reform is to protect homeowners who found themselves in debt and owning real estate that had mortgages of greater value than the real property value of the residence.
Today’s mortgage companies are offering two basic products. A fixed rate mortgage can be used to purchase residential property. The fixed rate mortgage has the same principal and interest for the life of the mortgage. With interest rates below 5 percent, purchasers are finding this the most desirable mortgage product.
Variable rate mortgages have the advantage of low payments at the beginning of the mortgage. The interest rate changes every year or two, depending on the lender and the interest rate set by the Federal Reserve. If the buyer thinks interest rates are going to rise, the fixed rate mortgage is the product to get.
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