Just as homes come in various styles and at different price points, so do the ways you can finance them. There are a number of loan options to choose from, but deciding which kind is best for you requires a little bit of time and research.
Many home shoppers assume the best choice is the ever-popular 30-year fixed loan, which offers the advantage of a set interest rate, regardless of how the market rises or falls. But if you don’t plan on living in your home for 20 or 30 years, an adjustable rate mortgage could potentially be a better choice. This loan type allows you to get a lower initial interest rate compared to a fixed-rate mortgage, but it isn’t guaranteed to remain at that rate, so be sure you understand how much the interest rate could change before selecting that loan type.
If a low down payment or low credit score is your primary hurdle, a government-backed loan might be a good option. Federal Housing Administration (FHA) loans, VA loans or USDA loans offer unique financing options for people with lower credit scores, low down payments or people looking to live in rural areas.
Depending on your unique situation, a loan type that caters towards specific pain points might be more fitting for you than a traditional loan type. Explore more loans for unique scenarios.