Which of the following is considered a nontraditional mortgage product?

A nontraditional mortgage product is one that does not conform to the standard fixed-rate mortgage model, which typically features consistent monthly payments over the loan term. The interest-only mortgage is categorized as nontraditional because it allows borrowers to pay only the interest for a certain period, usually resulting in lower initial payments. However, once the interest-only period ends, the borrower must either start paying down the principal or refinance, which introduces a level of risk and complexity not typically associated with traditional mortgage products.

In contrast, fixed-rate mortgages, adjustable-rate mortgages, and VA loans follow more conventional structures. Fixed-rate mortgages offer stability and predictability in payments, adjustable-rate mortgages fluctuate based on market indices but still adhere to traditional frameworks, and VA loans are designed to provide favorable terms for veterans while remaining conventional in nature. Therefore, the defining characteristics of an interest-only mortgage set it apart as a nontraditional option among the choices provided.