FHA loans are the easiest to qualify. They need a low down payment and a FICO® score, but they will cost more over time because they need you to pay a mortgage insurance premium. You may receive an FHA loan from any FHA-approved lender. These loans are protected by the Federal Housing Administration (FHA), which basically means that the FHA protects lenders from damages by homeowners who default on their loans.
Especially for: Borrowers with lower credit scores and a down payment of less than 20%.
VA loans are for veterans, eligible living spouses and members of active duty service only. VA loans provide the ability to purchase a house without a down payment or premiums on private mortgages.
Especially for: Military-qualified borrowers who appreciate a low-interest rate and no minimum down payment.
Jumbo loans are mortgages in excess of the regular loan limit. This basically suggests that if your debt size is between $484,351 and $3 million, you’ll need a jumbo mortgage. Often require a credit score of 700 or higher and usually require a down payment of 10% or more.
Especially for: buyers of luxury properties and owners who wish to refinance jumbo-sized mortgages.
USDA loans are a U.S. program. Department of Agriculture and Rural Development. These zero-down-payment home loans are for low-income borrowers living in rural areas.
30-year fixed-rate mortgage
A fixed-rate mortgage for 30 years is a home loan with an interest rate set for the whole 30-year term. the most common home loan, the interest rate never changes, and the Lower monthly payment than with shorter-term loans.
Especially for: homebuyers who want a reduced mortgage payment resulting from long-term repayment. The fixed-rate makes the payment more stable.
15-year fixed-rate mortgage
The 15-year fixed-rate mortgage has an interest rate that is the same over its 15-year term. Also used for refinancing, The interest rate is guaranteed for the duration of the loan, Lower interest rate than longer-term loans, Higher monthly payment than 30-year loans, with the less overall interest taken out.
Especially for: home buyers and refinancers who want to generate equity and pay off the loan faster.
Conventional loans are a little harder to apply for but they normally pay less over time than the FHA loan. You will avoid paying private mortgage premiums if the down payment is 20% or higher. You will save hundreds of money on your annual interest payment.
An adjustable-rate mortgage is a home loan with an initial rate set for a specified period, which is then adjusted periodically.
Especially for: homebuyers who do not expect to get a mortgage for a long time, or who believe that interest rates will be lower in the future.
Interest-only mortgage payments are only needed on the interest charge of the lender. The balance of the loan or principal shall not be reduced during the interest-only payment period.
Especially for: Buyers with high monthly cash balance, increasing revenue, substantial cash deposits, or income that varies from month to month.
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