What You Need To Know About Home Payment

Introduction

The cost of buying a home is beyond many people’s reach and yet the same can be achieved with a little planning and help. There are many home payment financing options in the market and this has enabled many to get their dream homes. The most important thing is to know the many options available so as to make an informed decision that will be comfortable for you in terms of payments and the duration of installments to be paid out.

History

The mortgage system of home payment traces its origin to old England where the common law protected the creditor by giving him a stake in the debtor’s property. The property could be sold off to recover moneys owed as the mortgage was considered to be a conditional sale. The name mortgage, however originated from two Latin words; “mort” derived from the word death and “gage” which means to give up something valuable in the event that a debt was not paid. This home payment system spread to America and to the rest of the world with the migration of European settlers into new lands.

Features

There are different kinds of home payment plans that have tailor made to suit different kinds of people and putting into consideration their varying incomes, needs and lifestyles. There are different mortgage financiers too ranging from government, banks, and other lending institutions to individuals. The bottom line at the end of the day is the kind of agreement that is signed between creditor and the debtor. There are Government guaranteed mortgage loans that are designed to help low income earners and first time home owners. These are the easiest home payment plan to qualify for and have lower interest rates compared to other options. This is in a bid to encourage citizens to own homes and improve their living standards. This mortgage plan is divided into categories for low income earners buying in town, in rural areas and the last for service men and women.

Another home payment plan is that of the adjustable rate loans. Here the interest rates are low at the beginning of payment and increase with time, sometimes rising to very high levels since they have no cap. Balloon mortgages are another option and the condition with this kind of plan is that the outstanding sum is paid all at once at the end of the payment period. The other home payment mortgage plan is classified using the duration between the payments. There is the biweekly mortgage where payments are made every two weeks and the bimonthly where they are made every two months.

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