Mortgage Types

Everybody has different mortgage needs – which is why a variety of different loan types are offered. The most common home loans include:

Fixed rate mortgage: This is the most commonly sought loan option. As the name suggests, the rate stays the same throughout the life of your loan. Many borrowers start out with a 30-year fixed, but there are other options such as 25-, 15-, and 10-year options.

Adjustable rate mortgage: Also known as an ARM, this loan gives you a lower, fixed interest rate for the initial 5, 7, or 10 years – and then after, your rate and monthly payment can change annually based on current interest rates.

FHA loan: An FHA loan can help homebuyers who can’t afford a traditional 20% down payment, and allows for a less-than-perfect credit score. With an FHA loan, you can put down as little as 3.5% at closing.

VA loan: This loan is reserved exclusively for veterans, active-duty personnel, reservists, National Guard members and, in some cases, surviving spouses. This loan includes benefits such as no required down payments and the ability to buy with less-than-perfect credit.

There you have it. Now that you know about mortgages, there’s only one thing to do: start saving for that down payment!

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