1. Straight (or straight-term mortgage)
A loan in which only interest payments are made periodically with the entire amount due at maturity is called a straight (or straight-term) loan. Although such loans are not used frequently to finance the purchase of single-family houses, they are used quite often in land transactions. In these situations, developers will be able to pay for the land after development and sale. In the interim, they pay interest only.
2. Standard fixed payment mortgage
A standard fHed payment mortgage (SFPM) is a fully amortized loan that is completely paid off by equal, periodic payments. This is the standard type of loan used to finance single-family homes today. It is also used sometimes for income-producing properties, although partially amortized loans are used often more frequently to finance these properties. Payments on fully amortized mortgages are usually required monthly. At maturity of the loan, the loan balance is zero.
3. Partially amortized mortgage
If a loan is not completely paid off by equal, periodic payments, but periodic payments are required, it is a partially amortized loan. In oper words, the loan will be partially paid off by periodic payments, but there will a remaining balance on the loan which must be paid off at maturity. This remaining balance on a partially amortized loan is called a’, balloon and is satisfied by a balloon payment.
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