At Centum Mortgage Store, Ltd., we specialize in helping people get the best deals on their mortgages. A big part of that is helping them decide which of the various types of mortgages is best for their situation. To help you make informed decisions on this subject, in this article, we’ll be providing a brief overview of some of the different types of mortgages we work with.
- Conventional / Fixed-Rate Mortgages- One of the most common types of mortgages is the helpfully named conventional, or fixed-rate, mortgage. In a conventional mortgage, your monthly payments will stay the same year after year, so there’s never any surprises to worry about. These mortgages are available in different term lengths, but 15 and 30 years are the most common.
- Interest-Only Mortgages- Another type of mortgage that many people are familiar with is the interest-only mortgage. In this variety, you have the option of paying only the interest portion of your monthly payment, rather than the full amount, for the first five or ten years. This structure will ultimately lengthen the time it takes to pay off the loan in full, but we’ve found that the flexibility it offers is useful to people who are just starting out in their careers or who are otherwise in a temporary financial pinch.
- Reverse Mortgage- The last type of mortgage that I’ll be covering here is another one that you may have heard of before, namely the reverse mortgage. A reverse mortgage is a type of loan available to seniors with considerable home equity, through which they can borrow against the value of their home in order to receive monthly payments or a lump sum of cash. Rather than making monthly loan payments as with the above types of mortgages, in a reverse mortgage, the entire loan balance becomes due upon the borrower’s death. In our experience, reverse mortgages are a useful option for seniors whose net worth is primarily bound up in their homes, so they can have some much-needed cash on which to live from day to day.