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Types of Mortgage Products by Mind Map: Types of Mortgage Products
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Types of Mortgage Products

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Click on the circles with lines to access the Notes about the topic. See Doc Sharing for a printable version of the mindmap and notes.

Fixed Rate Mortgage

  The preferred choice of prospective homebuyers. Generally ranges from 3 to 21 percent. Generally amortized over a period of 10 through 40 years. Main disadvantage rests in its inability to react to market conditions.  

Balloon Mortgage

  Has both short-term and long-term features. Interest rate is amortized over a period of twenty or thirty years. Pay-off of the unpaid principal is usually between three and seven years. The borrower has a principal and interest rate favorable on a thirty-year calculation but the entire principal will be due and payable in a very brief period of time. For example:  In a 7/23-year balloon product, the principal and interest are amortized over a twenty-three year period, but the remaining principal will be due and payable at the end of the seventh year.  

Adjustable Rate Mortgage

  Usually start at a lower and more enticing rate which subsequently adjusts to a higher or lower rate depending on interest rate fluctuations. Adjustment periods can be anywhere from thirty days to several years. Amortized over a ten to forty year period but can change depending upon refinancing options or conversion rights exercisable over three-to five-year periods. Have a cap feature - base mortgage can only rise one or two points in a given year and up to five to six points over the life of the loan.  

Other Mortgage Products

Graduated Payment Mortgage (GPM)

Government Mortgages

Veterans' Administration (VA) Federal Housing Administration (FHA)

Reverse Annuity Mortgage

Assumed Mortgage