Hybrid Mortgages
They combine the features of fixed and adjustable mortgage rate loans. It means that it starts odd with a stable interest rate for a couple of years and then it converts to ARM. If you plan to sell your house shortly after the fixed term is over you should choose this type of mortgage.
Interest-only and balloon mortgages can be helpful when you are experiencing a temporary financial squeeze. They don't allow you to build equity in your home and can cause serious strain when the principal comes due. It happens because you pay only interest from five to ten years and principal never goes down.
Special types of mortgages are issued by government for those borrowers who have special circumstances. They are:
1) VA home loans (available for those who have served in the armed forces).
2) FHA-insured loans (guaranteed by the Federal Housing administration).
3) Freddie Mac (some of the mortgage products are available for those who obtain certain professions).
4) Lowdown payment options (available for those who have 20% down payment on a home).
Fixed rate mortgage
Adjustable rate mortgages (ARM)
Option ARMs (flex ARMs)