Mortgage refinancing may also turn sour for buyers with good credit. Private mortgage insurance (PMI) and long loan terms can make mortgage refinancing a bad deal. Private mortgage insurances usually apply when a homeowner borrows more than 80 per cent of a home's value. This protects the lender in case of a default or a foreclosure. Reducing even a fraction of your mortgage interest rates can save you a great deal of money on your mortgage. The rise and fall of mortgage interest rates have become erratic during the past 20 years. As a rule of thumb, mortgage interest rates go up when the economy is strong and stock prices rise. On the other hand, if economy weakens, mortgage interest rates go down. com, an 80 20 mortgage loan "allows people to buy without a down payment." An 80 20 mortgage loan is also for people who would rather leave their savings alone in buying a house. Most people who take on an 80 20 mortgage loans are usually young professionals. Hsieh further describe that these are "people who have gotten out of college and have good jobs. With an adjustable-rate mortgage payment, the chance of interest rates going higher is equal to its chance of going lower. Now here in also lies the risk of having an adjustable mortgage payment. When it comes to having an adjustable mortgage payment, there are no guarantees. It is either the interest rates will lower down or it will rise up. 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. 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. The high interest rates of 30-day fixed rate mortgage loans do not necessarily stop consumers from taking this type of loan.