Mortgage Center

Mortgage Types

Mortgage types refer to the various loan structures available for financing real estate purchases. These types include fixed-rate mortgages, with consistent interest rates over the loan term, and adjustable-rate mortgages, where interest rates fluctuate over time. Other variations include interest-only mortgages, government-insured loans like FHA and VA loans, and jumbo loans for high-value properties.

  • Adjustable-Rate Mortgage (ARM)

    An ARM has an initial fixed-rate period, followed by an adjustable interest rate that can change periodically, usually annually.

  • Balloon Mortgage

    Features lower monthly payments for a fixed period (usually 5-7 years) followed by a lump sum payment at the end.

  • Bridge Loan

    A short-term loan that helps bridge the gap between selling one home and purchasing another.

  • Buy-Down Mortgage

    Involves paying an upfront fee to reduce the interest rate and monthly payments

  • Conventional Loan

    Not insured or guaranteed by a government agency, these loans typically require a higher credit score and a larger down payment.

  • FHA Loan

    Insured by the Federal Housing Administration, these loans are suitable for first-time homebuyers and require a lower down payment.

  • Fixed-Rate Mortgage

    This is a traditional mortgage with a fixed interest rate for the entire loan term, typically 15, 20, or 30 years.

  • Graduated Payment Mortgage (GPM)

    The initial payments are lower and gradually increase over time.

  • Interest-Adjustable Mortgage

    This type of mortgage allows you to choose the interest rate, and the monthly payment adjusts accordingly.

  • Interest-Only Mortgage

    Borrowers pay only the interest for a set period, typically 5-10 years, after which they start paying principal and interest.

  • Jumbo Loan

    A loan that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA).

  • Reverse Mortgage

    Available to homeowners aged 62 or older, this type of loan allows them to convert their home equity into cash.

  • Second Mortgage/Home Equity Loan

    Borrowers use their home equity as collateral for a second loan, often used for major expenses or debt consolidation.

  • USDA Loan

    Backed by the U.S. Department of Agriculture, these loans are designed for rural and suburban homebuyers with low to moderate incomes.

  • VA Loan

    For eligible veterans, active-duty service members, and some National Guard and Reserves, these loans offer favorable terms and do not require a down payment.