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There are several types of mortgages available, including:
- Fixed-rate mortgage: This is the most common type of mortgage, where the interest rate remains the same throughout the life of the loan.
- Adjustable-rate mortgage (ARM): With this type of mortgage, the interest rate can vary over time based on market conditions.
- Interest-only mortgage: With an interest-only mortgage, the borrower only pays the interest on the loan for a set period, usually the first few years. After that, the borrower must start paying both the principal and interest.
- Balloon mortgage: With a balloon mortgage, the borrower makes small monthly payments for a set period, usually 5 to 7 years. At the end of the term, the entire balance of the loan is due in one large payment.
- FHA mortgage: This type of mortgage is backed by the Federal Housing Administration (FHA) and is designed to help low- to moderate-income borrowers. The down payment and credit score requirements are usually lower than with other types of mortgages.
- VA mortgage: This type of mortgage is available to eligible veterans and their families and is guaranteed by the Department of Veterans Affairs (VA). The requirements and benefits of VA mortgages may vary based on the veteran’s service history and other factors.
- USDA mortgage: This type of mortgage is available to borrowers in rural areas and is guaranteed by the United States Department of Agriculture (USDA). The requirements and benefits of USDA mortgages may vary based on the location of the property and other factors.
