Guide to Common Loan Types
VA Loans
Veterans Affairs or VA loans are government-backed loans offered as an exclusive benefit of military service. It is only made available to veterans, active duty, and surviving spouses.
- Pay as little as 0% down
- No monthly mortgage insurance premiums (MIP)
- Could be exempt from the upfront guarantee fee
- Reduced closing costs compared to conventional loans
- More leniency for past bankruptcy or foreclosure
- Pay as little as 0% down
- No monthly mortgage insurance premiums (MIP)
- Could be exempt from the upfront guarantee fee
- Reduced closing costs compared to conventional loans
- More leniency for past bankruptcy or foreclosure
FHA Loans
FHA loans are a type of government-backed loan, backed by the Federal Housing Administration. The FHA provides insurance on loans provided by FHA-approved lenders.
- Pay as little as 0% down
- No monthly mortgage insurance premiums (MIP)
- Could be exempt from the upfront guarantee fee
- Reduced closing costs compared to conventional loans
- More leniency for past bankruptcy or foreclosure
- More flexible qualification requirements
- Down payments as low as 3.5%
- Can accommodate lower credit scores
- Buyers can be approved with little to no credit history
Adjustable Rate Mortgages (ARM)
Adjustable rate mortgages start with an initial fixed rate. This initial rate lasts for a set period of years. ARMs typically offer a lower initial rate when compared to conventional loans, but do come with some unpredictability when the rate adjusts.
- Pay as little as 0% down
- No monthly mortgage insurance premiums (MIP)
- Could be exempt from the upfront guarantee fee
- Reduced closing costs compared to conventional loans
- More leniency for past bankruptcy or foreclosure
- Lower initial rate that adjusts after a set period
- Great for buyers who plan on short-term ownership or refinancing in the near future
- Great for homebuyers with a high level of financial stability
- A lower initial rate can help buyers qualify for a higher loan amount
- Choosing an adjustable-rate mortgage
- Precautions to consider before taking out an Adjustable Rate Mortgage
- Current vs. Past ARMs
- 11 Mortgage Terms Homebuyers Should Know
- 8 ways to save for a down payment
- How to buy a house for the first time
- Guide to the Mortgage Process
- 10 Ways to Improve Your Credit Score
- Mortgage Learning Center
15-Year Fixed Rate Mortgages
Conventional loans, or fixed rate mortgages, offer an easy-to-understand way to finance any home. Your rate and payments stay the same for the life of the loan. A 15-year conventional loan means that payments are structured so that the loan will be paid off in that time frame.
- Pay as little as 0% down
- No monthly mortgage insurance premiums (MIP)
- Could be exempt from the upfront guarantee fee
- Reduced closing costs compared to conventional loans
- More leniency for past bankruptcy or foreclosure
- Predictable payments
- Lower interest rate compared to a 30 year loan
- Pay less interest over the life of the loan
- Shorter term enables you to build equity faster
30-Year Fixed Rate Mortgages
A 30-year conventional loan offers lower payments than you would have for a 15-year loan of the same amount. However, this means it takes longer to pay off principal and thus build equity in your home.
- Pay as little as 0% down
- No monthly mortgage insurance premiums (MIP)
- Could be exempt from the upfront guarantee fee
- Reduced closing costs compared to conventional loans
- More leniency for past bankruptcy or foreclosure
- Predictable payments
- Makes long-term financial planning easy
- Longer term keeps monthly payments more affordable
Still not sure which type of mortgage is right for you?
Contact our Mortgage Loan Officer to discuss.