Some Types of Mortgage
As complicated as a mortgage is, you donâ€™t really expect for there to be only one type right? There has to be a different type of mortgage for different needs and different situations. For now, you will only be introduced to a couple but just trust that these types will pop up in conversations regarding mortgage at one time or another. They are not very complicated since most things are easier to understand in writing and you will not have a problem understanding what they are about.
Now assuming you have some really basic knowledge of mortgage, do you know what a conventional mortgage is? If not, then do not worry your pretty little head over it for here is an explanation. A conventional mortgage is a kind of mortgage where the underlying conditions and terms manage to meet a funding criterion that comes from Fannie Mae and Freddie Mac. Almost half of all mortgages, depending on several market conditions some consumer trends belong in the category of conventional mortgages. This means that the two entities known as Freddie Mac and Fannie Mae both purchase or at times guarantee around thirty-five to fifty percent of all mortgages that are made. This type of mortgage may come with adjustable-rate or fixed rate clauses.
Next is the assumable mortgage which is a kind of financing scheme that allows the outstanding mortgage and all its terms to be moved from the account of the current owner to the account of the buyer. By taking responsibility of the previous owner's accountabilities and remaining debts, the buyer may be able to avoid from having to take out a mortgage of her or his own.
Another thing is the silent second mortgage which is the secondary mortgage that is put on a certain asset that may not be known to the lender who provides the original loan. These silent second mortgages most often are utilized when the person known as the purchaser is not able to come up with the amount for the down payment which may be required by that initial mortgage. It is called silent since the original lender remains unaware of the mortgage's presence. You have to know that for some cases, silent second mortgages can be classified as fraud.