Popular Loan Types ...
Interest only loans: These loans can have a fixed rate or an adjustable rate. This type of loanprovides a lower payment for an initial period with the option of paying additional principal at any time. This program works well to leverage you into a more expensive property while keeping your payment manageable. It also works well if you expect your income to increase over the next few years.
Negative amortization loans: These loans are the king of leverage. Allowing a greatly reduced initial payment, this type of loan can maximize your buying potential. However, they are not for the faint of heart as your principal can actually INCREASE. These loans are used most effectively when the borrower wants to have the option of a minimum payment for a short period or anticipates a change of their financial situation in the future.
Fixed/adjustable combo loans: These loans are fixed for a period of time, usually 1, 3, 5, 7 or10 years and then change to adjustable. They work well when someone anticipates being in a property for a specific period of time because they offer a lower interest rate than a straight fixed interest loan.