A loan taken out to finance a home and which is made up of many components such as collateral, principal, interest, taxes and insurance is called mortgage. These components are defined as – the collateral of the mortgage is the house itself, the principal refers to the original amount of the loan, taxes and insurance are part computation and requirement in applying for a mortgage and are computed according to the location of the home and the interest charged is known as the mortgage rate.
Mortgage rates are generally determined by the lender and can be either fixed for the entire term of the mortgage or be variable being dependent on the fluctuating rates in the market. But for the most part, mortgage rates are variable depending on the rise and fall of interest rates floating in the homebuyers’ market.
The most influencing indicator for the …