Often, loans with unattractive mortgage interest rates are sold to FannieMae or FreddieMac which in turn, sell these loans to the secondary market. Mortgage investors purchase these secondary market loans with mortgage interest rates that are undesirable to the regular homebuyer. These investors are actually the ones who set the standards in mortgage interest rates. On the other hand, this could also cause a slight disadvantage for 30-year fixed rate mortgage borrowers. The overall interest bill of a 30-year fixed rate mortgage is much higher because of the long amortization period. And because payments for 30-day fixed rate mortgages are usually used to pay up the interest rather than the principal at first, borrowers will be building up their equity at a slower pace. Aside from that, people who want to consolidate their bills are drawn into mortgage refinancing. There are countless other reasons why people go for mortgage refinancing when buying a new home. However, it should be noted that not everyone benefits from mortgage refinancing. For homeowners with second mortgages, mortgage refinancing may backfire. A home mortgage is the contract that you sign in order to get a loan from a banking institution or lending company. The loan is the money that the lender provides for you. There are many kinds of home mortgages available in the market. These home mortgages differ in their loan terms or their rate status. For most people, refinancing a home only makes sense if the new home mortgage rate is 2% lower than your current rate. This idea no longer applies in today's market though, where loan terms are no longer limited to 30-year fixed rate mortgages. Lenders today are offering fixed rate mortgages with 15, 20, or 30 year terms. In an amortization mortgage, payment is divided into two portions - one for the interest cost and the other for the principal amount. The principal amount is the money originally borrowed from the amortization mortgage lender. The interest is the percent growth of the money as time goes. Amortization mortgage interest is computed based on the current amount owed.