Buying a home for the first time can feel a bit overwhelming. Anew Lending, the most reliable adjustable-rate mortgage broker in Elk Grove, CA, is here to help.

When setting up a mortgage to buy a home, there are many options to consider. Without assistance, you may not know what mortgage loan types to consider. Here are some of the most popular options available to home buyers today:

1. Conventional Loans

Conventional loans are mortgage loans without government backing, available as conforming and non-conforming loans. 

  • Conforming loans: These loans adhere to the Federal Housing Finance Agency (FHFA) guidelines regarding credit, debt, and loan size.
  • Non-conforming loans: These are loans for people looking to buy pricier properties and do not follow FHFA standards.

Should I Get a Conventional Loan?

Home buyers with healthy credit who can afford a higher down payment should consider one of these mortgage loan types.

2. Government-insured Loans

The Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), and the U.S. Department of Agriculture (USDA) back mortgage loans.

  • FHA-backed loans: FHA loans are ideal for home buyers who don’t have perfect credit and can’t afford a large down payment.
  • VA-backed loans: These loans offer low-interest mortgages for military veterans and their families.
  • USDA-backed loans: These are loans for middle- and low-income buyers for homes in rural areas that require either no down payment or 1% of the total loan.

Should I Get a Government-insured Loan?

If you or your spouse are a military veteran, a VA-backed loan is usually the best choice. Other government-insured loans are ideal for those who need a low down payment and have credit issues.

3. Fixed-rate Mortgage

With a fixed-rate mortgage, the interest rate of the loan never changes. This keeps the monthly payments the same throughout the term of the loan. Most fixed-rate mortgages come in 15- or 30-year loan terms.

Should I Get a Fixed-rate Mortgage?

Fixed-rate mortgages are best for home buyers who plan to stay in the home for more than five years. 

4. Adjustable-rate Mortgage

Adjustable-rate mortgages are loans where the interest rate changes with the state of the market. Many adjustable-rate loans begin with a fixed rate but change every six months once the contract period is over.

Should I Get an Adjustable-rate Mortgage?

Buyers who don’t plan to stay in a home for more than two or three years can benefit from the low interest rates of adjustable-rate loans.

There are mortgage loan types for home buyers of all walks of life. Click the link to read our guide to buying flipped houses and contact Anew Lending in Elk Grove, CA, at (916) 226-9991 for any questions.

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