3 Common Types of Mortgages – Which One is Right for Me?

Dated: 01/07/2020

Views: 1039

There are different types of mortgages to consider depending on your needs. Each come with its own pros and cons. Spending time to understand the options is the best way to choose the right loan for your needs. Choosing the right loan for you is one of the steps of the Home Buying Process. While loan programs and terms vary, the most common are:

Conventional Loans

conventional loan is normally still designed to be paid off in 30 years with equal monthly payments during the term of the loan. There are currently conventional loans that require as little as 5% down, although 20-25% is still commonplace. Private mortgage lenders have more flexibility with conventional loans than they do with government-insured loans. They don’t need to follow the guidelines set by those government agencies.

FHA Loans

An FHA loan is guaranteed by the Federal Housing Administration and remains an attractive option for a number of reasons, especially for the first time home buyer. A down payment as little as 3.5% can get you a home, and that can be a gift. It’s important to consider paying Primary Mortgage Insurance if you do not put 20% down on a home loan.


There are different types of mortgages to consider depending on your needs. Each come with its own pros and cons. Spending time to understand the options is the best way to choose the right loan for your needs. Choosing the right loan for you is one of the steps of the Home Buying Process. While loan programs and terms vary, the most common are:

Conventional Home Loan

Conventional Loans

conventional loan is normally still designed to be paid off in 30 years with equal monthly payments during the term of the loan. There are currently conventional loans that require as little as 5% down, although 20-25% is still commonplace. Private mortgage lenders have more flexibility with conventional loans than they do with government-insured loans. They don’t need to follow the guidelines set by those government agencies.

FHA Loa
FHA Loans

An FHA loan is guaranteed by the Federal Housing Administration and remains an attractive option for a number of reasons, especially for the first time home buyer. A down payment as little as 3.5% can get you a home, and that can be a gift. It’s important to consider paying Primary Mortgage Insurance if you do not put 20% down on a home loan.

VA Loan
VA Loans

VA (Veteran Affairs) is a loan program offered for Veterans and their spouses. While the terms can vary from 0-5% down payment, this loan may allow the borrower to finance as much as 100% of the home’s value in the loan. The VA website states: “With a VA-backed home loan, we guarantee (or stand behind) a portion of the loan you get from a private lender. If your VA-backed home loan goes into foreclosure, the guaranty allows the lender to recover some or all of their losses. Since there’s less risk for the lender, they’re more likely to give you the loan under better terms. In fact, nearly 90% of all VA-backed home loans did not require a down payment.”

Bottom Line

Selecting the type of mortgage will vary from person to person. Your lender will also have more specialized options for you, such as adjustable rate loans and 10 or 15 year loans. They can also explain the additional costs associated with each type of loan program.
Part of purchasing a home is to find the right financing. Your lender will talk you through your options. Your real estate agent can help you find a trusted lender if you haven’t spoken to a lender yet.

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JC Carrillo

Born and raised in Las Vegas, The Carrillo Brothers recognize the trust their clients place in them. With over 12 years of experience in the real estate industry, JC has been continuously ranked among....

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