Conventional Mortgage

Let's get more familiar with some of the different types of mortgages that are available and which one will best suit your needs. The next several posts will deal with the different types of mortgages. The conventional mortgage has equal payments over a 15,20, or 30 years based on a fix interest rate. The mortgage offers home buyers certainty about the future loan payments. The mortgage payments are set at a level that allows amortization of the loan; that is, the balance owed is reduced with each payment. Since the amount of the mortgage is large, payments during the early years are applied mainly to interest, with only small reductions in the principal of the loan. Near the end the majority of the payment is applied to the balance.