Mortgage loans title

Types of Mortgage Loans

When you are buying a house the major consideration (other than finding the right house for you that you like of course!) is deciding on whicy type of mortgage loan is right for you. It is important to understand the major differences between mortgage loan types. Below is a brief summary of the major differences.

There are two basic types of home mortgage loans, fixed and variable.

Fixed rate mortgage loan
This is the standard type of loan that is most common. As the name of the loan says, you pay a fixed rate over the life of the loan. In most cases this type of loan term is either 15 or 30 years.

Adjustable rate loan (ARM)
With this type of mortgage, the interest rate you pay (and therefore your payments) will change as the years go by. Generally the interest rate during the first year, and over the first several years is below the market rate. Over a period of time, the interest rate will change based on the market interest rate environment and the terms of the loan.

Variations and other types of mortgage loan structures

There are other types of loan structures that are typically variations or even hybrids between fixed and adjustable mortgages. Here are the major types of home mortgage loans:

  • FHA Loan
  • VA Loan
  • Balloon type mortgage
  • Reverse mortgage
  • No documentation mortgage
  • Seller financing

What is the next step?

America’s Lending Partners’ free loan request service will match you with up to four lenders to help you lower your interest rate. no matter which loan type you select.

Good Luck!

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