Types of Home Loans: FHA, VA, USDA …OMG!

Go back to the Lesson Center

Lesson Rating

VN:F [1.9.18_1163]
Rating: 3.0/5 (9 votes cast)

Share This Lesson

Share this with a Friend

Fill out the form below, and we will share this link with your friend.


  • Home loans, also called mortgages, come in various types. We explain each and discuss mortgage insurance.


    Common Mortgage Loan Types

    Conventional Mortgage. This is the most commonly used type and usually has the best rates.  You’ll typically need at least 10% for a down payment and good credit. Can be for 15 or 30 years or “interest only” where you are not paying any principal in your payment.

    “Interest only” loans have a bit lower payment but you don’t pay off any of the loan balance when you make your regular payment.

    Mortgage Insurance. Alright, this isn’t a mortgage type, but you need to know about it! If you put less than 20% down on a home, mortgage insurance protects your lender in case you quit making payments. The cost varies by type of loan so ask your Mortgage Professional about it with every loan you discuss.  Mortgage insurance can now be a tax write-off depending on your income level, due to a recent change in the tax laws.  Also, once you believe you have at least 20% equity, you should contact your lender to find out about getting rid of Mortgage Insurance, also known as PMI.

    FHA Mortgage. Thought of as the first time home loan program but actually available to anyone. The down payment is only 3.5% and is more forgiving of lower credit scores. The interest rates are not as attractive as Conventional, but qualifying for the loan isn’t as tough either.  Here is a great in-depth look at The Top 5 things you should know about FHA home loans from our friends at Homeownership University.

    FHA Mortgages are what most people consider to be “first time buyer loans”.  Not all lenders can offer them.

    VA Loan. Zero down payment loan, but you must be a veteran.  We discussed it fully in Does Zero Down Really Exist.

    USDA Rural Housing Loan. Zero down payment loan explained in Does Zero Down Really Exist.  This USDA Mortgage Loan can only be used in designated areas & towns, but their definition of rural may be more flexible than you think.

    Adjustable Rate Mortgage (ARM). These have rates that start out lower than the current rates, but can change after one, two, or five years – usually upward!

    Adjustable rate loans got many home owners into trouble when their rates went up faster than expected.

    203k Rehab Loan. Allows you to finance in larger fixup expenses. Full details in Finding Cash for Fixup and in our blog “How Does a 203k Fixer Upper Loan Work

    Your bank, credit union, or Mortgage Professional may have a few additional local loans as well so be sure to ask.

    Thinking of buying a home in the Portland, Oregon area? Checkout our First Time Home Buying Classes!

    Types of Home Loans: FHA, VA, USDA ...OMG!, 3.0 out of 5 based on 9 ratings
    Types of Home Loans: FHA, VA, USDA …OMG! was last modified: April 6th, 2012 by David Axness

    Choose a state from the drop-down menu for specific state information related to this lesson.


    4 Trackbacks

    1. […] some of which even offer as low as 3.5% down payment options. You can check out this comprehensive list of the different types of available mortgages […]

    2. […] on a type of mortgage. If you’re settling down for decades, a Fixed Rate Mortgage may be right, but if it’s a starter […]

    3. By Mortgage Loans Explained – Zosia Real Estate on January 5, 2017 at 7:16 pm

      […] FearlessHomeBuyer Article: Types of Home Loans: FHA, VA, USDA …OMG! […]

    4. […] Source: Fearless Home Buyer […]

    Post a Comment

    You must be logged in to post a comment.

    Contact Us

    My Fieldset
    1. (required)
    2. (valid email required)
     

    cforms contact form by delicious:days

    Your email address and personal information are confidential and will not be sold or rented by Fearless Homebuyer.


    Attend a Class   »