A level payment mortgage is a mortgage in which the monthly payment is the same every month for the life of the loan. The payment is calculated so that the loan is paid off at the end of the term. The advantage of a level payment mortgage is that the borrower knows what their mortgage payment will be every month, making budgeting easier. The disadvantage is that the borrower may end up paying more interest over the life of the loan than with a variable rate mortgage.

##### What is mortgage and types of mortgage?

A mortgage is a loan that a borrower takes out to purchase a property. The loan is secured by the property itself, which means that if the borrower defaults on the loan, the lender can foreclose on the property and sell it to recoup the loan amount.

There are two main types of mortgage loans: fixed-rate and adjustable-rate. Fixed-rate mortgages have an interest rate that remains the same for the life of the loan, while adjustable-rate mortgages have an interest rate that can fluctuate over time.

#### Is it better to pay extra on principal monthly or yearly?

There is no definitive answer to this question since it depends on a number of factors, including your personal financial situation. However, as a general rule of thumb, paying extra on your mortgage principal each month can help you save money on interest and pay off your loan faster. On the other hand, making an annual lump-sum payment towards your principal can also be beneficial, particularly if you receive a discount for doing so. Ultimately, the best strategy for you will depend on your unique circumstances. What is the technical definition of a mortgage? A mortgage is a loan that is used to purchase a piece of property. The loan is secured by the property, which means that if the borrower defaults on the loan, the lender can repossess the property. Mortgages are typically paid back over a period of 15 or 30 years.

What are the 5 basic parts of a mortgage payment? The 5 basic parts of a mortgage payment are:

1. Principal: This is the amount of the loan that you are borrowing and is the amount that you will ultimately need to pay back to the lender.

2. Interest: This is the cost of borrowing the money and is typically a percentage of the principal.

3. Taxes: This is the amount that you will need to pay in property taxes to your local government.

4. Insurance: This is the amount that you will need to pay for homeowner's insurance.

5. Escrow: This is an amount that is set aside each month in order to pay for things like property taxes and insurance.

### What is a disadvantage of a balloon payment?

A balloon payment is a large, lump-sum payment made at the end of a loan's term. It is typically used to satisfy the outstanding principal balance on a loan.

While a balloon payment can lower your monthly payments during the loan's term, it can create difficulties when it comes time to pay off the loan. If you are unable to make the balloon payment, you may be forced to sell the property or take out another loan to pay off the balance.