Fixed Rate-
|
a loan with an interest rate that can not change
during the life of the loan. These are recommended
for people planning to stay in their home for more
than five years or those who may be living on a
fixed income.
|
Adjustable
Rate-
|
a loan with an interest rate that can adjust to reflect
the movements of its market index. Generally these
have a lower initial interest rate and payment. Often
these will allow people to qualify for larger loan
amounts.
|
Hybrid Loan-
|
a loan with an initial period that carries a fixed
interest rate. After the initial period has ended the
rate can then begin adjusting to reflect the market
movements of its index. This has the same benefits
of an adjustable rate loan, but includes an added
element of security.
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