A conventional loan is any mortgage loan that is not insured or guaranteed by the government (such as under Federal Housing Administration, Department of Veterans Affairs, or Department of Agriculture loan programs). Conventional loans can be conforming or non-conforming.
An FHA insured loan is a US Federal Housing Administration mortgage insurance backed mortgage loan that is provided by an FHA-approved lender. FHA mortgage insurance protects lenders against losses.
A VA loan allows eligible active-duty service members, veterans and eligible surviving spouses to finance a home with no down payment, no mortgage insurance and lenient credit requirements. VA direct and VA-backed Veterans home loans can help Veterans, service members, and their survivors to buy, build, improve, or refinance a home. You’ll still need to have the required credit and income for the loan amount you want to borrow. But a Veterans home loan may offer better terms than with a traditional loan from a private bank, mortgage company, or credit union. For example, nearly 90% of VA-backed loans are made with no down payment.
A jumbo loan is a mortgage bigger than $647,200 in most areas. Buyers looking to purchase a luxury home or a house in a high-cost real estate market may need a jumbo loan to finance their property.
A home equity line of credit, or HELOC, is a loan in which the lender agrees to lend a maximum amount within an agreed period, where the collateral is the borrower's equity in their house.
A mortgage with an interest rate that changes during the life of the loan according to movements in an index rate. Sometimes called AMLs (adjustable mortgage loans) or VRMs (variable-rate mortgages).
The traditional 30-year fixed-rate mortgage has a constant interest rate and monthly payments that never change. This may be a good choice if you plan on living in the same home for seven years or longer. If you plan to move within seven years, then adjustable-rate loans are usually cheaper. Often times, it may be harder to qualify for fixed-rate loans than for adjustable rate loans. When interest rates are low, fixed-rate loans are generally only slightly more expensive than adjustable-rate mortgages. Fixed-rate loans may be a better deal in the long run, as you can lock in the rate for the life of your loan.
This loan is fully amortized over a 15-year period and features constant monthly payments. It offers all the advantages of the 30-year loan, plus a lower interest rate—and you'll own your home twice as fast. The disadvantage is that, with a 15-year loan, you commit to a higher monthly payment. Many borrowers opt for a 30-year fixed-rate loan and voluntarily make larger payments that will pay off their loan in 15 years. This approach is often safer than committing to a higher monthly payment, since the difference in interest rates isn't that great.
Some lenders offer a 20-year or a 10-year fixed rate mortgage. These options are not always available, but when they are can serve as an alternative from the traditional 30-year or 15-year fixed mortgages.