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UNKNOWN TYPES OF MORTGAGES

Few of you might be wondering what is unknown types of mortgages. However, there is no need to worry; it is not just another type of mortgage, but a type of mortgages which are known to lesser number of borrowers. Out of the total mortgages granted by different lenders very few borrowers avail these type of mortgage, therefore, this category of mortgages is referred as 'unknown type of mortgage.'

Now, mortgage types can be divided into different categories based on their features e.g. on basis of loan amount, interest rate, duration, etc. Some uncommon types of mortgages are as follows:

  • Bi-weekly Mortgage;
  • Jumbo Mortgage;
  • Balloon & Construction Mortgage ;
  • 2-Step Mortgage Loan;
  • Assumable Mortgage Loan.

Bi-weekly Mortgage: - As the name suggests, these are mortgage loans where the payment of interest differs from the common mortgages, like ARM of Fixed where interest payable and rate are calculated on the monthly basis. In this type of Mortgage, rate of interest is paid weekly instead of monthly. This is a convenient loan for the borrowers who prefer to pay interest rate every week instead of every month.

Jumbo Mortgage: - As the name suggest something big as size of jumbo. Now, in this particular mortgage the amount borrowed exceeds the amount set by Fannie Mae and Freddie Mac. This loan is sometimes called Confirming Mortgage Loan or Conventional Mortgage Loan. This type of mortgage loan has higher rate of interest as compared to other loans which are to be paid every month.

Balloon & Construction Mortgage:- This type of mortgage is generally taken, as the name suggest for construction related loans .Under balloon mortgage loans, borrowers can pay low interest rate or low equated monthly installment (EMI) during initial stages of the loan. And, as the loan reaches its completion the amount of equated monthly installment becomes huge sum like the shape of a balloon. On the other hand, balloon & construction mortgage loans are lent to build the house in spite of buying built house. People who want to build their home according to their own desire can apply for these loans.

Two Steps Mortgage Loan: - Conforming to its name this is a combination of Fixed & Adjustable Rate Mortgage (ARM mortgage). The rate of interest may be fixed for 3, 5 or 7 years and after the given duration borrower has to pay adjustable rate of interest. Lender can call the due with a prior notice of 30 days.

Assumable Mortgage Loan: - This type of mortgage loan permits the owner of the house to hand over the loan to the buyer of the house at the time of sale i.e. seller loan is transferred to buyer's kitty instead of lender making the payment to the seller.

All the above-mentioned mortgage types are used seldom by borrowers. However, all the above-mentioned loan types are very convenient for borrowers meeting specific requirements.

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