When you are in the market to purchase a home, the many different things that warrant consideration can be staggering. In addition to finding the home that will best suit your needs, you need to choose the mortgage that is best for your situation — narrow down which mortgages to research further with the following list of mortgage types and brief descriptions. 

Fixed-Rate - These loans will have an interest rate that stays the same over the entire course of your loan. Fixed rates mean you can expect to pay the same payment month after month, even if your loan is as long as 30 years. The interest rate of a fixed-rate loan will often be higher than the starting point of an adjustable rate.

Adjustable-Rate - When an interest rate can be changed, usually annually, on a loan, it is known as an adjustable-rate mortgage. The percentage typically starts smaller than a fixed rate but will grow over time. 

Conventional - Once you determine if you want fixed or adjustable, you will need to decide between government-backed or conventional. A conventional loan is not going to be guaranteed or insured by the government. 

FHA - Often marketed to first time home buyers, but available to others, an FHA loan is one that is backed by the FHA (Federal Housing Administration), which in turn is managed by HUD or the Department of Housing and Urban Development. These loans ensure your lender against the possibility of default. These loans often come with lower down payments, but larger monthly payments due to extra insurance coverage. 

VA - If you are or were a member of the United States Military, you can consider a VA loan. These loans are also guaranteed by the government, which means that lenders will be reimbursed should the borrower default on the loan. One attraction to a VA loan is that sometimes they are available with 0% down. 

USDA / RHS Loans - These loans are offered to rural citizens who have a low, but consistent income, whose income prohibits obtaining a conventional loan. These loans are managed by the Department of Agriculture's department known as the Rural Housing Service. 

Jumbo Loan - A jumbo loan is one that exceeds loan limits that are set by Freddie Mac and Fannie Mae. A Jumbo loan often has a higher interest rate, but the borrower will have excellent credit and the ability to put down a larger down payment. 

Conforming Loan - A conforming loan is, simply put, a loan that falls within the guidelines that are set for the underwriting of loans. Government-run corporations set the limits and criteria into which any loan must fall. 

Although brief, this list can help you narrow down the various options available to you. Just like each house you will look at will hold pros and cons, loans will also. Research and discuss your options with your mortgage broker today. 



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