Home mortgage loan: Flexible terms, helpful lenders

All our home mortgage loan lenders will help you keep informed on all the terminology used in a mortgage, so you can make an informed decision. An adjustable-rate home mortgage loan has a low interest rate in the early years of the loan, while a fixed-rate loan stays constant at a higher rate. We'll discuss this more below.

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An adjustable-rate loan has a low interest rate in the early years of the loan, while a fixed-rate loan stays constant at a higher rate. With an adjustable, you'll pay less for short-term ownership of your house. On the other hand, if you think you may keep your home for more than 5 years, a predictable fixed-rate loan is probably a better choice for a home mortgage loan.

The federal Truth in Lending Act requires the lender to inform you of all the terms and costs of the home mortgage loan when you receive an application, including the annual percentage rate (APR). Additional costs include points (each point equals one percent of the loan amount), appraisal fees (for inspecting the property), and closing costs and loan initiation fees (commission for the lender).

Keep these terms in mind when you are thinking of a home mortgage loan; ANNUAL PERCENTAGE RATE (APR) - an interest rate reflecting the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage, because it takes into account points and other credit costs. The APR allows homebuyers to compare different types of mortgages based on the annual cost for each loan. AMORTIZATION - means loan payment by equal periodic payments calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance BALLOON (PAYMENT) MORTGAGE - usually a short-term fixed rate loan which involved small payments for a certain period of time and one large payment for the remaining amount of the principal at a time specified in the contract.

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