Most Popular Mortgage Options

by John Baer 10/06/2019

When it comes to financing your home, you have a several mortgage options available. Each type of mortgage offers different advantages, so be sure to do research before applying. Below are some of the most popular types of mortgages borrowers may consider. 

Conventional Loans

A conventional loan is a mortgage not insured by the federal government. In most cases, conventional loans will conform to the standards established by Fannie Mae and Freddie Mac. However, some lenders may offer loans that do not adhere to these standards, which are known as non-conforming loans. In most cases, conventional loans will require a down payment of 20 percent. Otherwise, you will have to pay mortgage insurance. 

FHA Mortgages

FHA mortgages are a popular type of government-backed loan that is designed to give people with lower credit scores and/or lower buying power the ability to purchase a home. If you opt for an FHA mortgage, you may not need to make as large of a down payment, but you will need to pay mortgage insurance. Backed by the Federal Housing Administration, these loans are popular among first-time homebuyers. 

VA Mortgages

VA mortgages are home loans backed by the U.S. Department of Veterans Affairs. These loans are available to current members of the military as well as veterans. If you qualify, VA mortgages are very beneficial, as they offer a lower interest rate and may not require a down payment. VA mortgages don’t require you to pay any mortgage insurance, either. 

Jumbo Mortgages

A jumbo mortgage is a loan that has limits higher than most other mortgages, which allows you to buy a more expensive property. These loans are most popular in areas where home prices are higher. Interest rates on jumbo mortgages are usually comparable to the rates paid on a conventional loan. However, the qualification requirements are much more strict. In most cases, you will need to show proof of significant assets, as well as a high credit score. Some lenders may offer other options, but the mortgages above are the most common. 

Keep in mind that even after you have chosen the type of mortgage you want, you will still have other decisions to make with regard to the type of rate and the length of the term. To make the best decision for your needs, consider working one-on-one with an experienced mortgage agent who can review your situation and help you choose the loan that makes the most sense.

About the Author
Author

John Baer

John's mission, as a real estate agent, is to make his clients' home buying experiences as stress-free as possible by offering"concierge" real estate service during each step of the process. After all, buying a home should be one of life's most exciting and uplifting experience. During the last 22 months John has earned the "Top Selling Award" 7 times in the Scarsdale office, averaging a sale of a home approximately every 27 days. He is a Seller Representative Specialist (SRS).Fewer than 2.5% of all New York State realtors have earned this designation. He is also a Seniors Real Estate Specialist (SRES) and has been providing service excellence to seniors for over 40 years. Fewer than 2% of all realtors nationally have earned this designation. In short, you need a trustworthy and reliable real estate agent who truly understands your needs and concerns.John is that real estate agent. A graduate of Oberlin College, John earned a Masters degree in hospital administration from Columbia University and a Doctorate in public administration from New York University. He writes a monthly article entitled Real Estate Matters for a Westchester newspaper and serves on several Westchester community boards.