Different Types of Mortgages You May Consider

 In Real Estate Articles

If you’re planning to purchase a home, like many other homeowners, you might not have hundreds of thousands of dollars at your fingertips. This means that you’re likely to need a mortgage loan to buy your home, and you might be wondering what options are available to your unique situation, and what different types of mortgage loans entail. In brief, here are a few key pieces of information surrounding the most common types of mortgage loans available in today’s market.

FHA Loans

An FHA loan is a common borrowing route for many homebuyers because this type of loan is insured by the Federal Housing Administration (FHA), so that the lender is assured the borrower will not default on the loan. Because of this guarantee, the borrower is required to pay for the mortgage insurance coverage. Though this route typically makes a borrower’s monthly mortgage price a little higher, it tends to be a very dependable loan.

Conventional Home Loans

Conventional home loans have either fixed rates or adjustable rates, and with this type of loan, the buyer typically agrees to pay the mortgage loan off in thirty years from the time of the home’s purchase, though the time period varies occasionally. A fixed-rate mortgage loan will be paid in uniform installments over the length of the loan, without the interest rate changing. Adjustable-rate mortgages have the potential to change rates over time.

These loans are common and can be applied for at banks, credit unions, and mortgage brokers’ offices.

VA Loans

A VA loan is less common than FHA or conventional loans, as they are only available to veterans of the armed service. These loans, like FHA, are guaranteed loans, but rather than being provided by the Federal Housing Administration, VA loans are provided by the Veterans Administration. Like all other loans, there are conditions that are required for a VA loan, and a lender that’s experienced with these types of loans should be able to explain the conditions in full.

If you’re looking to buy a home, it’s best to visit a lender or bank to further explore what loan types are available to you. There are generally many more options available than the three mentioned above. There are new programs being developed all the time, so it’s a good idea to visit more than one office to determine your best course of action.

Let my team at Keystone Realtors® meet all your real estate needs. I have over 16 years of experience in buying and selling in the Santa Clara and San Mateo County areas, specializing in the high-end, luxury market. Visit our website at https://www.paulphangureh.com for listings and information. You can contact me at 650-924-2544, or email at paul@paulphangureh.com.