Types of Mortgages

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More Types of Mortgages

Fixed Rate Mortgage
Adjustable Rate Mortgage
Interest Only Mortgage
Reverse mortgage
Piggyback Mortgage
Balloon Mortgage
Bridge Loan
Option ARM
Hybrid ARM

How Mortgages Work
Loan Program Comparisons

Types of Mortgages and Loans

Mortgage Types
Most mortgages today fall into one of the following categories. Click the link to read descriptions, advantages, disadvantages and examples of how to use one of these mortgages to your advantage.

Loan Types
These are terms that you may hear associated with any of the above mortgages when you are talking to a mortgage professional and give you details as to how these terms can affect your mortgage

Bridge Loan
Cash Back
Conforming and Non-Conforming
Debt-Consolidation
Investment Property Loan
Pre-Approved Mortgage
High Ratio Mortgage (above 75% of the value of the home)

More Names of Mortgages
Here are some terms you may hear used that while no longer common in today's mortgage industry are still used from time to time.

Buy to Let mortgage
Today this is called an investment property mortgage. It is a mortgage for a property that you do not intend to occupy, but rather to rent out.
HELOC or Home Equity Mortgage
A Home Equity Mortgage is a fixed rate mortgage taken against your equity as a second mortgage. A HELOC is also a second mortgage, but this comes with a line of credit that can be borrowed against and has an adjustable interest rate.
Hybrid ARM Mortgage
You may hear someone call an ARM a "Hybrid ARM." In true terms, an ARM adjusts each ann every month or year. Today's ARM's are actually "Hybrid ARM's" because they combine a fixed rate period and then become a true ARM.
Private Mortgage
This is a mortgage that is obtained from a private party. Typically an option for bad credit borrowers. Rather than having a co-signer, you may contract with a private party to buy the house and then buy the house back from them. These generally carry very high interest rates.
Remortgage
Today this is commonly called a refinance.
Simple Interest Mortgage
The interest rate is applied only to the original principal amount in computing the amount of interest rather thean the more common method today of compund interest where the interst rate is applied to both the principal balance and any accumulated interest.

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