Popularity
The United States Federal Housing Administration (FHA) helped develop and standardize the fixed rate mortgage as an alternative to the balloon payment mortgage by insuring them and by doing so helped the mortgage design garner usage. Because of the large payment at the end of the loan, refinancing risk resulted in widespread foreclosures. It was the first mortgage loan that was fully amortized (fully paid at the end of the loan) precluding successive loans, and had fixed interest rates and payments.
Fixed-rate mortgages are the most classic form of loan for home and product purchasing in the United States. The most common terms are 15-year and 30-year mortgages, but shorter terms are available, and 40-year and 50-year mortgages are now available (common in areas with high priced housing, where even a 30-year term leaves the mortgage amount out of reach of the average family).
Outside the United States, fixed-rate mortgages are less popular, and in some countries, true fixed-rate mortgages are not available except for shorter-term loans. For example, in Canada the longest term for which a mortgage rate can be fixed is typically no more than ten years, while mortgage maturities are commonly 25 years.
Read more about this topic: Fixed-rate Mortgage
Famous quotes containing the word popularity:
“The popularity of disaster movies ... expresses a collective perception of a world threatened by irresistible and unforeseen forces which nevertheless are thwarted at the last moment. Their thinly veiled symbolic meaning might be translated thus: We are innocent of wrongdoing. We are attacked by unforeseeable forces come to harm us. We are, thus, innocent even of negligence. Though those forces are insuperable, chance will come to our aid and we shall emerge victorious.”
—David Mamet (b. 1947)
“Here also was made the novelty ‘Chestnut Bell’ which enjoyed unusual popularity during the gay nineties when every dandy jauntily wore one of the tiny bells on the lapel of his coat, and rang it whenever a story-teller offered a ‘chestnut.’”
—Administration for the State of Con, U.S. public relief program (1935-1943)
“There are few cases in which mere popularity should be considered a proper test of merit; but the case of song-writing is, I think, one of the few.”
—Edgar Allan Poe (1809–1845)