The mortgage rate is the interest rate on a mortgage loan. It can be defined as the price that a borrower pays for a loan that enables the borrower to purchase real estate or any other real property. As per the mortgage contract, the title of the property belongs to the lender until such time the loan is paid off. The borrower can, however, enjoy the possession and usage of the property. In case of default on mortgage payments, the mortgage company has the right to seize the property.
Mortgage rates can be fixed or variable. Under fixed rate mortgages, the interest rate remains fixed during the term of the loan, which is generally fifteen, twenty, twenty-five, thirty, or forty years. The most popular mortgage terms are the fifteen- and thirty-year loans. Mortgages with variable rates are called adjustable rate mortgages, where the monthly payments change based on changes in the interest rate. This is because the rates are indexed to market interest rates, which do not remain fixed. During times of rising market interest rates, it is preferable for borrowers to choose a fixed rate mortgage. Mortgage rates fluctuate according to market conditions.
Another type of mortgage is the balloon rate mortgage, which is a short-term fixed rate loan that has fixed monthly payments that are based on a thirty-year repayment schedule, together with a lump sum payment at the end of the mortgage term.
Mortgage rates in Texas and other parts of the country have been low for the last few years, and this has helped the real estate market. There has been a surge in property values. Obtaining a mortgage rate quote is relatively easy, with most mortgage companies having their presence on the Internet. Mortgage loans seekers can adjust the terms of the loan according to their specific situations once the quote for the mortgage rate is obtained.