10 types of mortgages, explained |


The vast majority of homebuyers don’t have the funds to pay for a home outright, which means millions of mortgages are being paid off in monthly installments. With a US homeownership rate of 65.5% in the fourth quarter of 2021, the mortgage industry is big business: but not all mortgages are created equal.

Real estate platform ZeroDown has compiled a list of 10 types of mortgages, using information from mortgage providers, government agencies and real estate media.

The lowest mortgage rates often go to borrowers with the best credit history, the highest down payments (20% of the purchase price or more, typically), and the lowest debt-to-equity ratios. For everyone else, most of whom deposited between 6% and 7%, the federal government has a number of programs to help with mortgages: the Federal National Mortgage Association, or Fannie Mae; the Federal Home Loan Mortgage Corporation, or Freddie Mac; and the Government National Mortgage Association, or Ginnie Mae. These federally backed mortgages can help low-income borrowers who may have a smaller down payment or less-than-stellar credit record buy homes.

The list to come serves as an explanation of the pros and cons of the various mortgage options.


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