Deciphering Mortgage Loan Types

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Deciphering Mortgage Loan Types

Home loans got your head spinning? You're not alone. We all need a clear explanation of mortgage types before we take the plunge into the home buying market. Get help understanding types of mortgages here before you go shopping for your own home loan. We've compiled a solid list of resources to consider when understanding mortgage types.

There are four basic types of mortgage loans: fixed rate loans, adjustable rate loans, convertible mortgage loans and balloon mortgage loans. Learn more here. Walletpop: Types of Mortgage Loans

You may have heard of FHA or VA Loans. The Federal Housing Administration (FHA) is part of the U.S. Dept. of Housing and Urban Development (HUD). An FHA loan usually requires a lower down payment and must not exceed the statutory limit. Similarly, VA loans, backed by the Department of Veteran Affairs can offer lower down payments and terms if you qualify for one.

Conventional loans may fall under the category of conforming or non-conforming. Conforming loans are backed by Fannie Mae and Freddie Mac, who set terms as to how much the loan may be for, what kind of credit requirements are involved and amount of down payment. Jumbo loans, above the maximum amount established by Fannie and Freddie can have higher interest rates.

Need more help with explanation of mortgage types? We have a simple explanation and list of some of the more popular loans. See which loan is right for you.

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