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By : Lance Terdine
Submitted 2011-03-09 09:22:22 Today we will be discussing the different types of mortgages,[link widoczny dla zalogowanych], what they have in common and what is slightly different about each type. We will discuss primary mortgage, second mortgage and refinance-mortgage.
First on to the refinance-mortgage, this is a form of second mortgage for the specific purpose of getting different financing terms. Either to lump debts together, have a lower payment or a lower interest rate, or both. It is designed to turn your existing mortgage into the best mortgage you can get. So for example if your primary mortgage was at 7% interest,[link widoczny dla zalogowanych], you might refinance at existing rates and have a new loan payment with a 5% interest rate applied. This can save you thousands of dollars over the life of the loan.
A second mortgage is somewhat less specific. It is just a way of borrowing against the equity you have in your home. It helps in that they typically have lower interest rates than consumer debt and there are tax benefits as well. This is a common way of leveraging the equity you gained from making your housing payments.
A primary mortgage works like a refinance-mortgage,[link widoczny dla zalogowanych], only it is the first mortgage that you get on the home. There will be closing costs as well as an agreed upon interest rate or a variable interest rate depending on the terms of the loan. Mortgages of this type are typically for 15 to 30 years in length with 30 years being considered standard.