What are the different types of mortgages?

In Oklahoma, there are several types of mortgages that a person may choose to finance a home purchase. The most common type of mortgage is the traditional fixed-rate mortgage, in which the borrower pays the same interest rate for the life of the loan and the loan is repaid in full at the end of the loan term. Adjustable-rate mortgages (ARMs) are another popular type of mortgage in Oklahoma. ARMs typically start with a lower interest rate than a fixed-rate mortgage, but the rate can change over time. The rate changes are based on a predetermined index and the amount of change each year is limited. Balloon mortgages are another option that may be attractive to borrowers who plan to sell their home or refinance before the end of the loan term. With a balloon mortgage, the borrower only has to make payments on the interest for the life of the loan, and then pays the entire balance in one large payment at the end of the loan term. Finally, there are subprime mortgages, which are geared to people with less-than-perfect credit and are typically higher-interest loans. Subprime mortgages usually have shorter terms and may include high fees and penalties. Before committing to a mortgage, it is important to review all of the terms and conditions of the loan to ensure that it is the best fit for your financial situation.

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What are the different types of mortgages?

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