Buying a house can often be a difficult process. Decide the location and cost of the house you wish to buy. Assess how much of a down payment you can make. Compare the various interest options available by obtaining quotes from a number of lenders, and choose the best. The rates are sometimes subject to frequent fluctuations. Also, there is competition among lenders. Mortgage calculators can help to work out the interest burden.

Generally, for long-term loans the interest would be lower than for a short-term loan. For a thirty-year mortgage, the total interest paid would be much more

than the amount borrowed. Resorting to bi-weekly payments instead of the usual monthly payment could reduce the load.

Mortgages can be broadly classified into two types. In repayment mortgage, both interest and capital are paid over the term of the mortgage. Here, the amount

borrowed gets reduced throughout the period. The advantage is that you can regularly pay off lump sums into your mortgage account throughout the life of the loan. This reduces both interest and capital. Prepayment, however, may attract a penalty. In the case of death of the borrower, the mortgage would still

have to be paid.

In the second type of mortgage, only the interest is paid back regularly, while the loan is repaid at the end of the term. This can lead to problems if adequate

financial arrangements are not made in advance. There are different schemes like endowment plan, savings account, pension plan or insurance to provide the

funds to meet the lump sum liability. Study them carefully before opting for interest-only mortgages.

Understanding all the implications of the various types of home mortgages can be quite difficult. You should therefore consult a competent financial advisor

before finalizing a mortgage that is best suited for you.