In the United states, mortgages can be classified into four groups. These categories represent the different reasons for which people get mortgages.

With regards to this, we will be examining the distinct categories of mortgages.



  1. Multifamily mortgage
  2. Farm Mortgage
  3. Home Mortgage
  4. Commercial Mortgage


Multifamily Mortgage

This type of mortgage is acquired by investors to finance residential properties of five units upward. To be able to get tenants who are interested in the homes, the investors need to find a suitable location. Facilities like good schools, a gymnastic centre, a shopping mall etc can attract potential tenants.

Investors opt for a multifamily mortgage because of the following reasons;


To earn extra income: more income is made from getting a multifamily mortgage. How much profit made is determined by the location of the property being mortgaged.


 Reduced cost of living: they can decide to move into one of their units when they feel the need to. This reduces extra expenses on rent.


 Return on Investment: investing in a multifamily mortgage gives rise to a higher return on investment than any other investments.


Farm Mortgage

This kind of mortgage focuses on agriculture and farmers. It is used to finance the acquisition of farm land, farm equipment etc.

Reasons for obtaining a farm mortgage may include;

For diversification: a farm mortgage is acquired to be able to extend farm products as their demands rise.

For more profits: To keep up with profits from farm produce, a farm mortgage can be obtained.

 To buy out a competition: A mortgage can be acquired to expand the farm in order to beat a competition.


Home Mortgage

A home mortgage allows a financial institution to give out a loan for the purpose of residence. The home in which the loan was used to purchase serves as a collateral. When there’s a default payment by the borrower, the home is confiscated by the lender.

A home mortgage is acquired for the following:

A place to live: a home mortgage is obtained basically to provide a roof over one’s head.

An investment: houses and real estates are considered as investments. Once the loan is being settled, the house becomes yours automatically.

 Ease of payment: When you get a home mortgage, you are allowed to pay back in instalments. This reduces the pressure that comes from rushing to get money for a home.


Commercial Mortgage

A commercial mortgage is acquired for commercial properties like an industrial warehouse, office building, shopping centre, etc. The returns from this mortgage are used for the day to day running of a commercial property.

The reasons for acquiring a commercial mortgage include;

For development: this is when the mortgage is gotten to be able to extend a commercial property.

For restructure: a mortgage can be gotten to reconstruct an entire property. This may include paying workers or buying more equipment.




Mortgages are acquired on different bases, for different reasons in the United states and other countries around the world. Each category has its unique features and significance.

With these categories, determining the mortgage best for you won’t be difficult since you now know the purposes of each.




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