what does 'high variance' mean on mortgage

You pay a fixed interest rate throughout the life of the loan, and the longer the term, the lower the monthly payments. Terms for these loans can come in different lengths and structures, but lenders typically offer 15-year and, most commonly, 30-year mortgages. The most popular mortgage choice among homebuyers is a so-called 'conventional loan' - a mortgage that isn't backed by the government, and is instead offered by a bank, credit union or online lender. (For more, check out this list of best mortgage lenders from CNBC Select.) What's a typical model for a mortgage? Fail to make the payments, and the bank will take possession of your house, which is collateral for the loan. Once you repay the loan - principal and interest - over a set number of years, you own the house free and clear. While your payment is likely to be the same every month, early payments you make will be much more heavily weighted toward interest, while later payments will chisel down the principal. Money you put toward paying back your mortgage is divided into interest payments and payments toward the loan's principal. Generally, the balance of what you owe on the house is divided over a series of regular payments over a fixed period of time. Increasing the size of your down payment decreases what you'll owe on a monthly basis as you pay back the loan. The portion of the home's price you pay up front is called the down payment. When you apply for a mortgage through a lender, they'll ensure you meet specific requirements, such as having a certain credit score and being able to pay at least part of the home's value. A mortgage is a type of loan used to purchase a home or other type of real estate, as an alternative for paying the entire purchase price up front.

What does 'high variance' mean on mortgage