A home mortgage is usually borrowed for how long
A. 5–10 years
B. 10–15 years
C. 15–25 years
D. 20–30 years
Answer Explanation for Question: A home mortgage is usually borrowed for how long
Home mortgages are loans provided by banks, mortgage companies, or other financial institutions. The term of a home mortgage ranges from three to 30 years, with either a fixed or floating interest rate. When a home mortgage is paid off, the lender retains the title to the property, which is then given to the borrower.
Mortgages offer a wider range of citizens the opportunity to own real estate, since they do not require full payment up front. If a borrower is unable to make the payments, the lender can foreclose on the home (take the home from the homeowner and sell it on the open market) while the mortgage is in effect. Home mortgages are either fixed or floating rates, which are paid monthly with a contribution to the principal loan amount.
Generally, the interest rate, as well as the periodic payment, are the same in a fixed-rate mortgage. Interest rates and periodic payments fluctuate with an adjustable-rate home mortgage. The interest rates on adjustable-rate mortgages are typically lower than those on fixed-rate mortgages because the borrower bears the risk of an interest rate increase.