Final answer:
A reverse mortgage is the type of loan that is repaid when the borrower dies or the property is sold. It is meant for older homeowners to turn home equity into cash without regular loan repayments until they move out or pass away.
Step-by-step explanation:
The type of mortgage in which the loan is repaid when the borrower dies or the property is sold is the reverse mortgage. This type of loan is typically used by older homeowners who want to convert part of the equity in their homes into cash. The loan amount, along with interest and fees, does not have to be paid back until the borrower no longer uses the home as their primary residence or passes away.
A variable-rate mortgage, also known as an adjustable-rate mortgage (ARM), has an interest rate that can change over time, usually in response to changes in a corresponding financial index that's associated with the loan.
Conventional mortgages are seen as standard or 'plain vanilla' home loans that aren't part of a specific government program. They can be either fixed-rate or adjustable-rate loans.
With a balloon-payment mortgage, borrowers pay a large, lump-sum payment at the end of the loan term. This type of mortgage usually features lower interest rates and monthly payments but requires a significant payment at the end of the mortgage term.