This video tells you about the most common types: Fixed Rate, ARM, Balloon, and 2-Step.
First, Fixed Rate Mortgages: Payments remain the same for the life of the loan, generally 15 or 30 years. Interest rates remain the same, so payments are predictable.
A second common type is an Adjustable Rate Mortgage, or ARM. ARM Payments increase or decrease on a regular schedule along with changes in interest rates – increases are typically subject to limits.
Third, Balloon Mortgage: These offer very low interest rates for an initial period of time, usually 5, 7, or 10 years. When that time has elapsed, the balance is due or refinanced, though not automatically.
Finally, a Two-Step Mortgage – Interest rates adjust only once and remain the same for the life of the loan.
Many other types are available, including government-insured mortgages, and VA loans for veterans. Talk to lenders and real estate professionals to assess your situation.