Types of Loans
Fixed-Rate Mortgage
A loan with the same interest rate and payment over the entire life of the loan. Most offer the terms of 15 and 30 years. As you compare the shorter terms with the longer terms, you’ll find the short-term fixed loans lower lifetime interest payments than similar loans with longer terms but you also have a higher monthly payment.

Adjustable Rate Mortgage
A loan with a fixed rate for the first 1, 3, 5, or 7 years. An ARM has an interest rate that changes once each period for the remaining life of the loan. Because the interest rate can change after the first period, the monthly payment may also modify.

Federal Housing Authority (FHA) Loans
The FHA is a division of the Department of Housing and Urban Development. Its main activity is the insuring of residential mortgage loans made by private lenders. FHA also sets standards for underwriting mortgages.

Department of Veterans Affairs (VA) Loan
A mortgage loan made by an approved lender and guaranteed by the Department of Veterans Affairs. VA loans are available to veterans and those currently serving in the military, and can have a lower down payment than other types of loans.

Balloon Mortgage
Usually a short-term fixed-rate loan, either 5 or 7 years, which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at the end of the term.

Alternative Documentation or No Documentation Type Loan
These mortgages are products that certain lenders offer that generally require no income verification and/or no asset verification. These mortgages are generally a wise choice for self-employed people, those who do not wish to verify their income, and those with a blemished or no credit history.

Second Trust or Second Mortgage
A mortgage made subsequent to another mortgage and secondary to the first mortgage.