The amortization period for this type of fixed rate home mortgage is longer and the monthly payments are lower. One drawback, however of this home mortgage is its high interest bill and slow equity build-up. 15-year fixed rate home mortgages attract borrowers because of its relatively shorter amortization period. Below are some questions you need to consider: - Is there a possibility that my income will rise up enough to cover higher adjustable-rate mortgage payments should interest rates go up? - Is there a chance that I might take on other sizable debts like a loan for a car or school tuition in the near future? If interest rates rise to the point that the interest due cannot be covered by your monthly amortization mortgage payment, the unpaid amount will be added into the loan balance, increasing it over time. For instance, the payment cap of your amortization mortgage is 7.5%. With a monthly amortization mortgage payment of $1,000 and rising interest rates, your new payment would normally be $1200/month. This increase in mortgage rates is especially true if the loan amount exceeds the established loan limits of Fannie Mae and Freddie Mac. Loan limits typically changes at the beginning with each year to conform with the trend mortgage rates are taking. The length of the loan may also affect mortgage rates. The high interest rates of 30-day fixed rate mortgage loans do not necessarily stop consumers from taking this type of loan. They reason that higher interest bill for 30-day fixed rate mortgages increases the amount they can deduct at tax time. This could potentially reduce or perhaps, even eliminate their federal income tax liability. Banks generally reject mortgage applications if the credit score is below 670. With a mortgage broker, you can shop around for a lending company that offers bad credit mortgage loans. In looking for the mortgage that's right for you, make your choice based on the best mortgage terms a lender can offer you.