Did you know that there are different types of mortgages? The type of mortgage you choose depends on your credit situation, your goals and needs at the time you borrow and the lender you work with. Three of types of mortgages we'll discuss in this post are closed mortgages, open mortgages and convertible mortgages.
Closed mortgages involve an agreement to pay a certain amount each period over a certain amount of time at a certain interest rate. If you make early payments, you might be subject to penalties in a closed mortgage. These types of mortgages are good for the lender, because they ensure compensation if the buyer saves on interest by paying early. They might also be beneficial to the buyer, though, because terms and interest never change.