 Sam
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Joined: 21 May 2005
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Location: CALIFORNIA
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 Posted: Sun Apr 04, 2004 10:51 pm Post subject: Renegotiable Rate Mortgage |
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Renegotiable Rate Mortgage is a kind of home loan introduced by the Federal Home Loan Bank Board. The interest rate and monthly payments on this kind of loan remain fixed for several years. At the end of this period, the rate is negotiated periodically. This depends upon the prevailing market conditions.
In most cases, a renegotiable rate mortgage is a long term loan for up to 30 years and provides for negotiations at equal stated intervals. It can also be a short term loan renewed at regular intervals at new mortgage rates, but based on a long term fixed rate home loan.
The monthly payments on this kind of home loan are secured for 3 to 5 years. The maximum rate adjustment does not exceed 0.5% in a year and 5% throughout the life of the loan. Such a mortgage is also known as Rollover mortgage and it's a good option for buyers with rising income level. |
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