Types of Mortgages
Conventional Loans: Conventional loans usually are more lenient with respect to the appraisal and condition of the property. If you are purchasing a "fixer- upper", you may need to use a conventional loan. Also, expensive homes above the FHA loan limit are generally financed with conventional loans.
FHA Loans: FHA Loans are insured by the Federal Housing Administration under H.U.D. They usually require less downpayment than conventional loans and are easier to qualify for.
VA Loans: VA Loans are guaranteed by the Veterans Administration. A veteran must have served 180 days active service. VA loans can be done with a zero down payment.
USDA Loans: Mortgages offered for homes in rural areas as determined by the US Department of Agriculture. These mortgages offer 100% financing ($0 down) and no monthly mortgage insurance.
Fixed Rate Loans: Fixed Rate Loans have one interest rate which is fixed for the entire term of the loan.
Adjustable Rate Mortgages: Adjustable rate mortgages have an interest rate that is adjusted at certain intervals based on a specific index. Some ARM programs fix the interest rate for an initial period of two to five years, and adjust the rate thereafter at pre-determined intervals.