Types of Loan By: Barrett Cameron

Open Mortgage a mortgage that permits repayment of the principal amount at any time, without penalty Pro- The rates start our low Con- They can rise based on the market

Closed Mortgage is one that cannot be repaid without prepayment penalties during its term, except as permitted in the mortgage agreement Pro- interest rate stays the same over the years Con- Possibility of paying much more if there is a surprise

Convertible Mortgage An Adjustable Rate Mortgage (ARM) that gives the borrower the option to convert to a fixed-rate mortgage. Convertible ARMs are marketed as a way to avoid rising interest rates and usually include specific conditions. Pro- option to change a fixed rate Con- Rates can go up based on the market

Split-Term Mortgage a comfortable compromise between the pros and cons of fixed and variable interest rate loans. Pro- you get a little of both Con- it still might not be what you want

Reverse Mortgage a special type of home loan for older homeowners (62 years or older) that requires no monthly mortgage payments. Pro- don’t have to pay a monthly mortgage Con- may be expensive closing costs

Refinancing finance, typically with a new loan at a lower rate of interest. Pro- can get a new loan with a better rate Con- could cost a lot to get a new loan