What is interest rate?

Interest rate refers to the amount of money a borrower must pay a lender for the use of borrowed money. In the case of mortgage loans, the interest rate is the rate of interest charged by the lender. In Virginia, the interest rate for mortgage loans is determined by both the lender and the borrower. Generally speaking, the interest rate can be either fixed or adjustable. A fixed rate mortgage loan has an interest rate that remains the same for the duration of the loan while an adjustable rate mortgage loan has an interest rate that may fluctuate over the life of the loan. The borrower and lender usually agree to an initial interest rate that is then fixed for a predetermined amount of time. After that time period, the rate may change depending on certain conditions. It is important to note that interest rates are influenced by the current market, so it is important to shop around and compare different interest rates before deciding on a mortgage loan.

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