One disadvantage though is that 15-year fixed rate home mortgages have higher monthly payments and higher interest rates. Adjustable Rate Home Mortgage Contrary to a fixed rate home mortgage, an adjustable rate home mortgage is a home mortgage where the rates are adjusted regularly, usually after the first year is over. For example, in a $100,000 interest-only mortgage loan, the per month difference is $100. If the loan is worth $1,000,000, then the difference per month grows to $1,000, a substantial amount that can be put to better use. The savvy investor can make it so that his investment using the money he gets from the per month difference growth of an interest-only mortgage can increase within a short period, thus leveraging incomes to build assets. 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. Lower interest rates mean lower monthly adjustable-rate mortgage payments. Higher interest rates mean higher monthly adjustable-rate mortgage payments for you. Thus the longer you've been paying for an amortization mortgage, the lower the interest becomes. Negative Amortization Mortgage: Pros and Cons Payment plans for an amortization mortgage are usually based on adjustable rate payment loans. Adjustable rate amortization mortgages are loans where the amount you pay depends on the rise or fall of interest rates. This decreases their debt and increases the value of their home. With a reverse mortgage, everything works in the reverse. You have your home. You convert its value into cash. And then you take out that cash every now and then, thereby increasing your debt and reducing your home equity. Of course, this is not always the case with reverse mortgages. This type of second mortgage loan is also called balloon payment loans. Second Mortgage Loan Costs Fees may be charged by some lending companies for the money you borrow on second mortgage loans. The fees, referred to as "points," are usually a percentage of the second mortgage loan. One point on your second mortgage loan is equivalent to one percent of the amount you borrow.