If it has been a long time since you looked at mortgages, you may be surprised that there are many more than three types available. The amount of information for the various types of mortgages can be overwhelming. In order to understand them little bit better, it is important to understand who is sponsoring the money. For example, some types of mortgages are sponsored by the government. Two common mortgages sponsored by the government are for veterans or first time home owners.
Most of the other types of mortgages are based on someone having other mortgages already. Primarily, this is called a combo or piggyback mortgage. This means that you take out two different mortgages at the same time that follow each other. These are not done by the government. They are typically different types of mortgages done by the same financial institution like 95 mortgages, 100% mortgages, and even 125% mortgages. Most likely, a bank or credit union. Another type of mortgage is a 40 year mortgage which can help lower your payments, but it can be more expensive in the long run. 40 year mortgages need to be carefully assessed before choosing one.
In order to help younger mortgage payers, some mortgage companies offer interest only mortgages. This means that you can pay the interest at a time in the future. In the beginning, you do not pay the interest. You only pay for the monthly mortgage amount. Not all types of mortgages require you to pay interest, but most of them do unless they come from the government. Interest only mortgages are put in place to compete with government mortgages by offering the option to pay the interest at a later date.
There are also various types of adjustable rate mortgages. These types of home mortgages can often be seen as confusing to many consumers. The reason for this is because there is no standard. The interest rate can fluctuate over any designated period of time. For example, monthly, annually, or quarterly. There are also other variations to this kind of mortgage. There is also the option to have a mortgage buy-down. This means that there is an initial period at first where the interest is low. Then, at a later date, this increases.
Of course, there are also many other types of mortgages – like no doc mortgage loans for those who want quick approval and less hassle. There are a specialty mortgages for people who are buying a home that needs many repairs. This kind of loan is partially funded by the government. There are also mortgages or someone who has been trying to sell a home for an extended period of time. And of course reverse mortgages for elderly people who need to sell off their house for money to live on – for which the reverse mortgage jobs industry has become popular. Read our post “How Does A Reverse Mortgage Work” to find out more info on the reverse mortgage.
Many people are familiar with an equity mortgage that is placed on a home that has already been mostly paid off. However, many people are not familiar with a reverse mortgage that is a type of home mortgage or someone over the age of 62 who already owns their home. The lender pays a monthly sum to the home owner as long as they live in the home. At the end of this period, the lender takes ownership of the home.