The lender will hold the title of the asset until the full amount of the loan plus interest is paid. The repayment can last up to a couple of years, depending on the terms of the loan. The fixed rate mortgage and the adjustable-rate mortgage are two of the most common mortgages in the nation.

As the name suggests, a fixed-rate mortgage has an interest rate that remains the same throughout the lifespan of the loan. For example, if the loan is for a period of 10 years, the interest rate will remain fixed irrespective of the increase or decrease in market rates.

The interest rate can change at the end of pre-determined intervals with the adjustable-rate-mortgage. For example, if the agreement states interest changes over six-month periods, then after the six-month period, the rate will assume the market rates. The borrower is left at the mercy of the market rates with this sort of mortgage. The interest rates that will be given cannot be dictated by the lender or the borrower. Still most adjustable-rate mortgages have an interest rate cap to protect both the lender and the borrower, which protects them from excessive interest rate increases or decreases.

Another sort of mortgage is the balloon mortgage, though not quite as popular as the first two. Borrowers are permitted to make fixed amount payments for a certain period of time in the balloon mortgage and then make one large payment referred to as a balloon payment towards the end of the loan. This is actually a great deal, particularly if you plan to sell the property eventually or refinance it to purchase another one.

Except that the borrower is not required to make a large payment at the end of the payment period, the graduated payment mortgage is also similar to the balloon mortgage. What is often done with graduated mortgage payments is to start with really small amounts of payments. Then the payments will gradually increase until they reach a stabilization point.

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