Mortgage loans are loans made available to borrowers on real or personal property as security for the payment of debt. Mortgage loans are to be paid over a definite period of time. Mortgages are usually given on real estate as security rather than other properties. The lenders who offer mortgages are usually banks and building societies. There are specialist mortgage lending companies also that offer mortgages. Different kinds of mortgage loans are available. Therefore, make certain you have sufficient information before you settle on a mortgage. Also, verify the rates, points and fees since these can vary with different mortgage lenders. Before you pick a mortgage, be aware of the advantages and disadvantages of different mortgages.

There are different mortgage loan rate options. First is the fixed rate. In fixed rate, the interest rate is fixed for the term of the loan. In the USA, the term of the mortgage is often two, three, four, five or ten years. Still, some lenders offer longer term fixed rates that are over five years. Long term fixed rate are found to be quite expensive. Hence, more people choose short term fixed rates. If the borrower thinks that the rate will increase, fixed rate mortgages are the perfect one. However, if the rates fall, the borrower does not benefit. If the borrower tries to give up fixed rate mortgage, he/she will have to pay penalties.

Another type of mortgage rate is the variable rate. The borrower pays the going rate on the mortgage. When the interest rate changes, the mortgage rate also changes. Usually, the effect of change in interest rate is estimated once a year and the payments are adjusted accordingly. Apart from fixed rates and variable rates, there are mortgage rates such as capped rates, cash back deals and discounted rates.