Different types of mortgages for Buyers
Things you need to know to help you through starting the journey of buying your first home.

Buying a home is one of the most significant investments you will ever make. When it comes to financing your purchase, there are many different types of mortgages to choose from. Here are some of the most common types of mortgages for home buyers.

1️⃣  Fixed-rate mortgages
With a fixed-rate mortgage, the interest rate and monthly payment amount stay the same throughout the life of the loan. This type of mortgage is ideal for buyers who want predictable monthly payments and don't want to worry about interest rate fluctuations.

2️⃣ Conventional loans
A conventional loan is a mortgage that is not guaranteed or insured by the government, and is typically offered by private lenders such as banks, credit unions, or mortgage companies. Conventional loans usually require a down payment of at least 3%, and the borrower's credit score, income, and debt-to-income ratio are important factors in determining eligibility. One advantage of conventional loans is that they often have lower interest rates than other types of mortgages.

3️⃣  Adjustable-rate mortgages (ARMs)
An adjustable-rate mortgage has an interest rate that can change over time, typically after an initial fixed-rate period. This type of mortgage is ideal for buyers who want to take advantage of lower interest rates at the beginning of the loan term, but are comfortable with the possibility of their payment amount increasing later on.

4️⃣  FHA loans
An FHA loan is a type of mortgage that is insured by the Federal Housing Administration. This type of loan is ideal for buyers who have limited funds for a down payment and may have lower credit scores. The FHA loan program allows buyers to put down as little as 3.5% and has more relaxed credit score requirements than traditional mortgages.

5️⃣  VA loans
A VA loan is a mortgage that is available to veterans and active-duty service members. These loans are guaranteed by the U.S. Department of Veterans Affairs and often have more relaxed credit requirements and lower interest rates than traditional mortgages. This loan can be used multiple times as well and 100% financing is allowed for this loan. While this loan is backed by the VA, you should connect with a lender to apply for this loan since the VA doesn't actually issue the loan directly.

6️⃣  USDA Rural Development loans
A USDA loan is a mortgage that is available to buyers in rural areas. These loans are guaranteed by the U.S. Department of Agriculture and often have more relaxed credit requirements and lower interest rates than traditional mortgages. Also 100% financing is allowed for this loan.

7️⃣   Jumbo loans
A jumbo loan is a type of mortgage that exceeds the loan limits set by Fannie Mae and Freddie Mac, typically for homes that are valued over $726,200 in most counties and $1,089,300 in Clarke, Warren, and east towards DC. This type of loan is ideal for buyers who are purchasing high-value properties and need to borrow more than the standard loan limit.

When it comes to choosing a mortgage, it's essential to consider your financial situation and long-term goals. A good mortgage broker can help you understand your options and select the right loan for your needs. By choosing the right type of mortgage, you can secure financing for your dream home and achieve your homeownership goals.