The Types of Mortgage Loans From Which to Select
When you’re looking to buy a home, there are a number of mortgage loan types that you might qualify for. Before you move forward with the loan application process, you should be aware of the different types of mortgage loans so that you can choose the one that fits your needs. Each of these loan types has their own distinct benefits and drawbacks that might be of interest to you.
Fixed or Adjustable Rate Loans
Any type of loan is either a fixed rate or adjustable rate loan. Fixed rate loans will have the same interest rate across the entire term of the loan, which could be 30 years. A fixed interest rate means that your monthly payments will always be the same. Adjustable rate loans consist of an interest rate that will adjust on a periodical basis. These rates will usually change once every year following a few years of fixed rates. Some loans will consist of a fixed rate for the first three or five years before switching to an adjustable rate loan.
Government Loan Options
If you’re not interested in standard loan types and would like to explore other options, the three government loans that you might qualify for include FHA, VA, and USDA loans. FHA loans are managed by the HUD department within the federal government. These loans can be accessed by all borrowers and allow for lower down payments. VA loans are available for members of the military as well as their families. These loans are guaranteed by the government and come without any down payment requirement. USDA loans can be accessed by rural borrowers who have a low income.
Jumbo or Conforming Loans
This type of loan depends on the cost of your home. Conforming loans are ones that meet guidelines of financial institutions like Fannie Mae, which means that the loan doesn’t exceed a certain amount of money. Loans that cross this limit are riskier for the lender and will typically require larger initial payments and better credit scores to apply. If you need help finding the right loan for your home, search for the best loan officers in Las Vegas to assist you. A loan officer will provide you with recommendations on the right loans to choose.