A brainstorm on home equity loan
Conventional fixed rate mortgages are the most straightforward of the mortgage loans. The debt is amortized and repaid over a set number of years in equal monthly installments that consist of principal and interest and, frequently, yearly property insurance and tax escrow payments. Payments go first to paying down interest, then to principal. The best feature of this type of mortgage loan is the security inherent in having a fixed monthly mortgage payment amount. FHA (Federal Housing Administration) loans are federally insured mortgage loans that minimize the default risk to lenders if the borrowers are unable to put down a deposit equal to or greater than 20 percent of the purchase price.