Editor's note: This is the first of a two-part series. In many, if not most, countries, borrowers are offered one type of mortgage: Take it or leave it. Borrowers in the U.S., however, can choose from a large menu of mortgage types designed to meet different borrower and lender needs.These include fixed-rate mortgages (FRMs) with terms ranging from 10 to 40 years, and adjustable-rate mortgages (ARMs) with 30-year terms but initial rate periods ranging from one to 10 years. Many of these mortgages have an interest-only payment option for the first five or 10 years. And all are offered with multiple combinations of interest rate and lender fees. Difficulties in making decisions But having options is as much a curse as a blessing to borrowers who have no idea of how to make a selec...
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