Types of Loans
There are many different types of mortgages to choose from, but not all mortgages are the right fit for your personal needs and life situation. If you aren’t sure which mortgage to choose, we encourage you to call us or schedule a time to sit down and talk about your options before you make a decision. You may also see current rates and explore your loan options here. Below are the different types of loans to choose from:
A fixed-rate loan tends to be the most popular loan because of its security and the ability to lock your interest rate for the entire term of the loan. A 30, 20, or 15-year fixed conventional loan will have the same mortgage payment month to month. A 30-year fixed mortgage payment is most common and affordable, but choosing a 20 or 15-year loan will have lower interest rates.
Want to learn more about a fixed-rate loan?
An adjustable-rate mortgage loan offers lower interest rates in exchange for an adjustable rate after a few years. Some borrowers choose adjustable-rate loans because it is a lower monthly payment, or they do not plan on keeping their loan for a very long time. While your monthly payments may be lower, beware that if rates rise after a few years, you could be stuck with a higher rate and could have difficulty making your monthly payments.
Veterans Administration (VA) Loan
A VA loan is available for qualified veterans or their widows or widowers who have not remarried. VA loans have reduced interest rates, reduced closing costs, and may not require a down payment. A VA loan is perhaps the most powerful and flexible lending option on the market today.
Federal Housing Authority (FHA) Insured Loan
A Federal Housing Administration (FHA) loan is great for home buyers with a low income and limited savings. An FHA loan allows people to buy a home with a down payment as small as 3.5% or a down payment which has been given as a gift, secured loan, or grant. An FHA loan guarantees that a lender won’t have to write off a loan if the borrower defaults.
US Department of Agriculture (USDA) Rural Home Loan
USDA loans are 100% financed and can be a great loan solution for home buyers with low and moderate income living in rural areas. We can help you learn about the areas that qualify according to the USDA maps.
Single-Close Construction Loan
Single-close construction loans allow you to get both loans (the construction loan and the permanent loan) at once. When construction is completed, your loan becomes a traditional mortgage (your lender might say it gets converted, modified, or refinanced). These loans are also referred to as construction-to-permanent loans.