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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

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.