Types of Mortgages

YGrad TYPESORTGAGES MORTGAGES PRO CON FIXED-RATE MORTGAGE No surprises. The interest rate stays the same over the entire term, usually 15, 20 or 30 years. If interest rates fall, you could be stuck paying a higher rate. ADJUSTABLE-RATE MORTGAGE (ARM) 24 After an initial period, rates Usually offers a lower initial fluctuate over the life of the loan. rate of interest than When interest rates rise, generally so do your loan payments. fixed-rate loans. FHA (FEDERAL HOUSING ADMINISTRATION) Allows buyers who may not qualify for a home loan to obtain one low down payment. The size of your loan may be limited. VA LOANS Guaranteed loans for eligible veterans, active duty personnel and surviving spouses. Offers competitive rates and low or no down payments. The size of your loan may be limited. BALLOON MORTGAGE After an initial period, the entire Usually a fixed-rate loan with relatively low payments for a fixed period. balance of the loan is due immediately. This type of loan may be risky for some borrowers. INTEREST-ONLY MORTGAGE After an initial period, the balance Borrower pays only the interest on the loan, in monthly of the loan is due. This could mean much higher payments, paying a lump sum or refinancing. payments, for a fixed term. REVERSE MORTGAGE FEDERALLY INSURED Allows seniors to convert equity in their homes to cash; you don't have to pay back the loan and interest as long as Subject to aggressive lending techniques and false advertising, particularly by lenders that prey on seniors. Check to make sure the loan is Federally insured. you live in the house. YGrad %24