Fixed Rate Mortgage are loans paid off in
equal payments over the term of the loan. These loans are also
called level payment mortgages. The rate for this type of mortgage
is at a constant level throughout the term.
Adjustable Rate Mortgage are loans that
change interest rates with a predetermined market index. There are a
variety of market indexes used, and the index will be set when the
loan is made.
Graduated Payment Mortgages are loans in
which payments gradually increase by a certain percentage over the
first several years of the mortgage, then become fixed for the
remaining term.
Growing Equity Mortgages are loans in
which payments increase significantly each year according to a set
or a pre-selected index.
A Balloon mortgage is a loan that has a
series of monthly payments with the remaining balance due in a lump
sum at the end of the contract. Some balloon mortgages may contain
provisions for refinancing at the end of the balloon period.
