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Typical Home Loan Terms

There are a number of different home loans available today and one of the things you are going to need to understand about home loans if you want to know which ones are good for you is what the norm is. Norms are essentially typical elements in today's society and whenever you talk about anything in today's world, there are going to be norms that define it. Home loans, like everything else, have these norms as well and unless you are able to identify the norms properly, you are not going to know whether something you are getting is at a good price or not. A free market economy runs through competition and competition is what ultimately decides what these norms are.

Interest Rates

Interest rates for home loans are interesting nowadays. The dominant market still today when it comes to home loans is the United States market; ergo it is important to look at the United States market as being the beacon through which the rest of the world can be viewed. Whether you are talking about a home equity loan or a mortgage, the thing that you find immediately is that interest rates are pretty consistent. They tend to be in the range of 5-7% and most of the promotional rates that banks and credit unions use to get more customers will be around 5.25%.


Fees are of course another important part to the typical home loans and when it comes right down to it, typical home loans are those that have interest rates in the 5-7% as mentioned above. Fees can be very diverse depending on the specific agreement being invoked, but you will definitely see fees for everything from the late payment to the going outside of the payment schedule. Some home loans will actually try to charge you fees for paying more than you are supposed to pay each month and if you can manage to do so, it is a good idea to try to avoid these particular financial deals.

Term Length

The term length when it comes right down to home loans is something that is interesting to behold. It's actually different depending on whether you're after a home equity loan or a mortgage and indeed when you think about the mortgage, the typical mortgage agreement lasts for about 25 years. Some of the mortgages are going for 20 years as well, but these tend to be for people that are very reliable when it comes to their credit history. The vast majority of people will end up settling for a 25 year mortgage.


As far as other terms go for home loans, the idea of penalties for payment is perhaps the most commonly used other term. These are different from the actual fees themselves, because some agreements actually just consist of complete repossession based on missing a couple of payments rather than just a simple fee. It is important to be aware of what the other terms are as well so that you prevent getting any nasty surprises later on.

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