American General Mortgage

A mortgage loan consists of principal and interest. The amount of money borrowed to buy your home is called Principal. The amount paid by the borrower under certain privileges to the lender, usually over 30 years, is the Interest. When the mortgage pays by the borrower each month, some amount goes to paying the principal and some to interest. The owner's financial interest in a property is Equity. It is the difference between amount still owed on the mortgage loan and the property's fair market value.

What a General Mortgage Payment Consists of:-

1) Principal: The repayment of the original amount borrowed on a monthly basis.

2) Interest: The cost of borrowing the principal amount, repaid on a monthly basis.

3) Taxes: Real Estate taxes paid to a local government agency.

4) Insurance: Homeowners insurance on the home. Also any mortgage insurance, which is paid to protect the mortgage company.

Types of General Mortgages:

Fixed Rate Mortgage:
According to most home buyers fixed rate mortgage is best because mortgage rates are so low. It is possible to get a lower rate with an adjustable second mortgage, a fixed rate mortgage give you guarantee of low rate for the life of the loan. Since the mortgage rate does not go up, the best thing for the homeowners is secure the best fixed rate second mortgage they can find.

Adjustable Rate Mortgage (ARM):
In many ways an adjustable-rate mortgage differs from a fixed-rate mortgage. In a fixed rate mortgage, the interest rate remains the same during the life of the loan whereas in ARM, the interest rate changes periodically in relation to an index and payments may go up or down accordingly.