The home mortgage market is an extremely diverse and ever-changing sector. It's not always easy to keep up with how the market is moving, so we've compiled a list of frequently asked questions to help you understand home loans.
Home mortgages companies are a way to borrow money to buy, build, or improve your home. There are a few different types of mortgages: conforming, Jumbo, and hybrid. Conforming mortgages are the most common and easiest to get. Jumbo mortgages are for people who want a more expensive mortgage because they have more money available to borrow. Hybrid mortgages combine features of both conforming and Jumbo mortgages.
There are two main types of loans: mortgages and refinances. A mortgage is a long-term loan you take out to buy, build or remodel a home. A refinance is when you switch your existing mortgage into a new one.
Here’s a look at the different types of mortgages:
FHA Loans: If you have excellent credit, an FHA loan may be the best option for you. The FHA offers low down payments and allows you to borrow up to 97% of the value of your home. You can also get mortgage insurance if you have less than perfect credit.
VA Loans: If you have a military service record or are affiliated with the military, you may be eligible for a VA loan. The VA offers low down payments and no mortgage insurance requirements. Just be aware that these loans typically have higher interest rates than other types of loans.
Conventional Loans: Conventional loans are the most popular type of loan in the U.S. Most conventional loans require a 20% down payment and do not require mortgage insurance. However, because these loans are more common, they tend to have higher interest rates than other types of loans.