What are common types of residential mortgage loans available?

The selection of fixed-rate mortgage, adjustable-rate mortgage, and interest-only mortgage represents some of the most common types of residential mortgage loans available to borrowers.

A fixed-rate mortgage guarantees a set interest rate for the entire term of the loan, which allows for predictable monthly payments and stability over time. This makes it a popular choice for many homeowners who value consistency in their budgeting.

An adjustable-rate mortgage (ARM) features an interest rate that may change periodically based on fluctuations in market interest rates. This type of loan often starts with a lower rate compared to fixed-rate mortgages, making it attractive for buyers who may not stay in their homes long enough to experience rate adjustments.

The interest-only mortgage allows borrowers to pay only the interest for a specified period of the loan, after which they begin to pay both principal and interest. This can be useful for buyers looking to manage cash flow in the initial stages of home ownership.

Considering the other options, while they mention various types of loans, they do not capture the most common residential mortgage products as effectively. Balloon mortgages, equity mortgages, or unconventional loans like crowdfunding mortgages are less typical in the mainstream residential loan market. Conventional loans, FHA loans, and subprime mortgages are also important but are categorized more by their lending