What are the different types of mortgages?

Mortgages are loans that are used to purchase property. In Massachusetts, there are four different types of mortgages: Fixed Rate, Adjustable Rate, Balloon, and Reverse. A Fixed Rate mortgage is by far the most common type of mortgage and it involves an interest rate that does not change for the duration of the loan term. The borrower is responsible for making a set of regular payments to the lender that consist of both principal and interest. An Adjustable Rate mortgage is also known as an ARM. This type of mortgage involves a variable interest rate that changes with market conditions. Borrowers must make monthly payments based on the current market rate and the terms of the loan. A Balloon mortgage is a short-term loan with much lower monthly payments that is then paid off with a lump sum payment at the end of the loan term. A Reverse mortgage is a type of loan that is specifically for seniors who are 62 or older. They do not have to make regular payments but instead, the lender pays them in set installments. No matter what type of mortgage you choose, it is important to understand the terms of the loan and the potential risks that may come with it. It is also important to remember that all mortgages in Massachusetts must be recorded with the local government.

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What are the different types of mortgages?

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