The option ARM mortgage is another type of loan that offers borrowers different payment options. These include a 30-year and 15-year fully amortizing payment, an interest-only payment, and a specified minimum payment. This type of mortgage is complicated in that interest accrues. The portion that is left unpaid is added to the principal (negative amortization)
Mortgage buydowns are another variety and a good choice for people seeking to make payments at a lower interest rate. They can pay a fee to reduce the interest rate over a certain period of time. The mortgage payments cover the interest and the principal balance. Finally, there is the adjustable-rate mortgage whereby the interest rate fluctuates, going up or down on an annual, semi-annual, or monthly basis.
Apart from hybrid types, borrowers can opt for conventional loans or special mortgages such as swing loans, reverse mortgages, equity loans, and others.