5 Different Types of Mortgage Loans For Home Buyers
A new home may be one of the biggest purchases you’ll make in your life. Unless you can buy your new home entirely in cash, finding the right property is only half the battle. The other half is choosing the best type of mortgage loan. When you borrow money from a lender, you’re making a legal agreement to repay that loan over a set amount of time (albeit with interest). Your loan choice is a decision that will have financial consequences for the next 15 or 30 years. Use this guide to learn more about each mortgage type and how they might work for you. Types of Mortgages 1. Conventional loan Best for borrowers with a good credit score. It is the most common type of mortgage and refers to any mortgage not backed by a government agency. And it comes in two forms: Conforming loans – it “conforms” to the set of standards put in place by the Federal Housing Finance Agency (FHFA), which includes credit, debt, and loan size. Non-conforming loans – These loans do not meet FHF...