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When buying a new home, choosing the right mortgage is an important decision that will affect your life for years to come. A mortgage can allow a first time buyer to start their life in a home that they couldn’t otherwise afford, or allow an investor to retain their liquidity and continue investing elsewhere. Regardless of the purpose for which they are used, mortgages are a crucial facet of the real estate market and the types and mortgage rates available must be thoroughly understood when thinking about purchasing a property with financing. The current economic climate has drastically changed mortgage rates and qualifications. While mortgage rates are currently among the lowest seen in history, qualifying for those rates is far more difficult than it once was, as lenders have adopted more stringent screening requirements. A large part of the reason we are in this recession at all is due to the issuance of subprime mortgages to buyers with low credit scores, which resulted in about 80% of them doing exactly what the banks were afraid of – defaulting. Among several other considerations, the type of mortgage you choose is a decision that must be given extensive thought. A fixed rate mortgage is a type of mortgage where the rate remains consistent throughout the duration of the loan, giving borrowers stability with their payments. On the other hand, an adjustable rate mortgage allows borrowers to pay lower interest rates during the first several years, with escalating rates throughout the loan’s duration. No matter the type of mortgage you choose, it’s imperative to plan financially and save accordingly; a mortgage is a privilege and a benefit, but may become a nightmare hanging over your life if you can’t continue to pay.