Mortgages
Mortgage Terminology: A Few Quick Definitions
Let's start by defining the word mortgage itself: simply put, a mortgage is a large loan secured by real estate.
Other terms that will be helpful for you to learn are as follows:
The term refers to the length of time (e.g. 5 years) that a lender agrees to give you a mortgage and guarantees an interest rate.
A fixed rate mortgage provides a set interest rate over the term of the mortgage, while a variable rate mortgage has an interest rate that will fluctuate during the term. Check out the latest mortgage rates.
Amortization is simply the period of time (e.g. 25 year amortization) that it will take the period of time it will take you to pay off your mortgage in full.
Finally, a closed mortgage limits your ability to pay off your mortgage early, whereas an open mortgage gives you the option of paying off your mortgage in full at any time.
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