6 Types of Home Loans
If you’re thinking of purchasing a home in the new year, here’s 90-seconds of home loan knowledge. Definitely worth a watch.
1. Fixed Rate Loan
The most common type of conventional loan, it offers a fixed rate for the life of the loan. Terms are usually 15 – 30 years.
2. Adjustable Rate Mortgage
Rates are typically lower than you’d get with a fixed-rate mortgage, but your rate may adjust. If interest rates shoot up, so do your monthly payments. If rate drop, you’ll pay less per month.
3. FHA Loan
With a Federal Housing Administration, or FHA loan, you can put down as little as 3.5%.
4. VA Loan
If you’ve served in the U.S. military, a Veterans Affairs or VA loan is an excellent alternative. If you qualify, you’ll enjoy a home with no down payment and no mortgage insurance requirements.
5. USDA Loan
This home loan is designed for families in rural areas. No down payment necessary – and it offers discounted mortgage interest rates to boot.
6. Bridge Loan
An excellent option if you’re purchasing a home before selling your previous residence.