Types of Mortgages
- Mortgages are available in fixed-rate and adjustable-rate types.
- Fixed rates have a fixed interest rate for a specified number of years.
- Adjustable rates may offer lower initial rates but can change over time.
Property Collateral and Terms
- A mortgage uses a home as collateral, enabling lenders to foreclose in case of default.
- Main mortgage types include fixed-rate, conventional, and adjustable rate, each serving different homebuyer needs.
Government-backed Mortgages
- The federal government guarantees mortgages that meet specific requirements.
- Fannie Mae and Freddie Mac facilitate most conventional U.S. mortgages for borrowers with good credit and income.
TEXT: What are the two main types of mortgages and how do they differ?
Common Mortgage Terms
- The most common mortgage terms are 15 years, 20 years, and 30 years.