Mortgages BY: ALEX BLECKER

Open Mortgage  An open mortgage is a mortgage that permits repayment of the principal amount at any time, without penalty.  A pro is that the rates start low but a con is that they may rise based on the market.

Closed Mortgage  A closed mortgage is one that cannot be repaid without prepayment penalties during its term, except as permitted in the mortgage agreement.  A pro is that the interest rate usually stays the same over the years but a con is if there is a surprise you could be paying a lot more.

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.  A pro is that it gives the option to change to a fixed rate but a con is that the rates could be high based on the market.

Split-term Mortgage  The 'split loan' option is typically viewed as a comfortable compromise between the pros and cons of fixed and variable interest rate loans. A split mortgage allows you to reap the benefits of both the security of fixed rate loan and the flexibility of a variable interest rate loan.  The pro is that you get a little of both but a con is that it still may not be what you want.

Reverse Mortgage  A reverse mortgage or home equity conversion mortgage (HECM) is a special type of home loan for older homeowners (62 years or older) that requires no monthly mortgage payments. Borrowers are still responsible for property taxes and homeowner's insurance.  A pro is that you don’t have to pay a monthly mortgage and a con is that their may be expensive closing costs.

Refinancing  finance (something) again, typically with a new loan at a lower rate of interest.  A pro is that you can get a new loan with a better rate and a con is it could cost a lot to get a new loan.