Directions: Choose a mortgage loan that would be appropriate for each of the following individuals.

A. John and Mary are worried about the high interest rates that are currently being charged for loans. They can make a substantial down payment but dont want to pay high rates for many years.

B.Kim and Richard only have a little money to put down on a home although they both have jobs. They have never owned a home before.

C. April and Brad both have good jobs and are able to make a substantial down payment. Interest rates are currently relatively low

D. Samantha and Cody recently graduated from college and have both taken teaching jobs. Although they do not earn much income now, they expect to earn more in the future.

Banks and other lending institutions have many different types of loans ayailable for people interested in purchasing a home. Several of the more common types of mortgage loans are described below: - Conventional fixed-rate mortgages charge the same rate of interest over the term of the loan. They typically require a substantial down payment of 20 percent or more of the home's purchase price and have terms that can last from 15 to 30 years. - Adjustable-rate mortgages charge an interest rate that initially is lower than that charged on a conventional fixed-rate mortgage. This rate, however, will be adjusted as prevailing interest rates change. They also require a substantial down payment and have terms with a 15 to 30 year maturity. If the borrower does not have the 20% down payment, they will be required to purchase Private Mortgage Insurance (PMII). - Federal Housing Authority (FHA "To qualify for FHA's minimum down payment of 3.5%, a borrower must have a credit score of 580 or above," Brian Sullivan, HUD public affaiirs specialist, tells NerdWallet. "Between 500 to 579 , the borrower must put 10% down." With an FHA loan, if you put less than 10% down, you'll pay 1.75% of the loan amount upfront and make monthly mortgage insurance payments for the life of the loan. With a down payment of 10% or more (that is, a loan-to-value of 90% or better), the premiums will end after 11 years. The PMl costs are determined based upon the credit score of the borrower and the loan-to-value of the property being purchased. Conventional loans with less than 20% down charge private mortgage insurance. It can be charged as an upfront expense payable at closing, or built into your monthly payment - or both. It all depends on the insurer the lender uses. - Graduated payment mortgages set relatively low monthly mortgage payments when the mortgage is first created and then gradually increases the payments over the first five years or so. The payment often level off after that time. This type of loan may be useful for someone whose income will increase over time because the payments will increase as the income increases. Directions: Choose a mortgage loan that would be appropriate for cach of the following individuals