Types of Mortgages
Do you think it’s the right time to begin the purchase of your 1st home? Do you know the different types of mortgages and which may be the best option for you? Here are the main mortgage types and what they mean:
1. Conventional (Also known as fixed rate)
– This loan type is a common choice for many home-buyers as they are known for consistency. Monthly payments typically don’t change over the life of your loan. Loan terms vary from 10-40 years with the most common being a 15 or 30 year term. Quicken Loans.com defines a conventional loan as one that may be suitable for borrowers with good credit and a low debt to income ratio.
2. FHA Loans
-This mortgage type is guaranteed by the federal housing authority. Generally the mortgage insurance is built into this loan type and down payments are typically smaller. These loans are designed for low to moderate income borrowers.
3. VA Loans
-This loan type is available through the United States Department of Veterans Affairs. These loans are provided by private lenders like banks and mortgage companies. This is an attractive loan type as qualifying is more simple, and generally does not require a down payment. It is a non conventional loan which means the government agrees to repay a portion of the loan to the bank if you default or foreclosure.This loan is good for US veterans, active duty service members, and widowed military spouses.
Are you ready to explore the mortgage loan options? Do you have more questions about the homebuying process? Connect with us at Bowen Group Realty, LLC
. We are here to answer any questions, and get you on the path to homeownership!
Information cited from https://www.payoff.com/life/dreams/8-types-of-mortgages/