The 30-year fixed-rate mortgage is still alive and kicking. In fact, it is still the most popular type of mortgage. Adjustable models, however, are gaining favor fast.
That's the main story. But a significant undercurrent is that lenders have been coming up with a dizzying array of new mortgage configurations to try to drum up business. Here's a sampling:
* The reverse no-payment purchase mortgage. This allows elderly people with a large down payment to borrow the balance needed to buy a home but make no payments during their lifetime. The first such loan has been made by Arcs Mortgage Co., Calabasas, Calif., for a customer in Seattle.
* The 7-23. This loan, available from many mortgage bankers, has a fixed rate and payments for seven years, then has a single conversion to a different fixed rate for the next 23 years. HSH Associates of Butler, N.J., says the rate on such loans is now 8.125%, not much more than on a 15-year fixed. But the payments are lower because of the 30-year term.
* The 10-and-1 adjustable rate mortgage. This loan has a fixed rate for 10 years, then reverts to annual adjustments. The current rate, HSH says, is slightly less than the one on the 7-23 mortgage.
From a marketing standpoint, all of these loans have the virtue of being easy to explain. Even the reverse mortgage can be summarized briefly: the borrower pays nothing, with the monthly payments simply being added to the debt. On the borrower's death, the house is sold and the loan repaid.
