Mortgage professionals can share this with their clients to help them understand the different types of mortgage loans. This article might also be useful for real estate investors who are searching for loans to finance their investments.
There are many home loans available in the US for the aspiring homeowner. Each one has varying advantages and disadvantages. They also differ in terms of the qualifications and criteria needed. Since there are numerous types of mortgage loans in the US, Mortgage Professional has trimmed it down to the seven most common ones. Read on to know more about them.
Fixed-rate vs. adjustable-rate mortgages
The first two types of mortgage loans that we will discuss are the fixed-rate and adjustable-rate mortgages. The easiest way to distinguish the two is to define their timeframe and how the interest rates change over the course of that period.
For fixed-rate mortgages, there is a longer period when the homeowner’s interest rates will remain constant. Adjustable-rate mortgages, on the other hand, also have a specified timeframe when the interest rates will not fluctuate. However, it is shorter and will change to an adjustable interest rate afterwards.
Fixed-rate mortgage or conventional home loans
About 90% of home buyers choose a 30-year fixed-rate loan, making it the most popular mortgage type in the country.
