Types of mortgage loans in 2026

Core Insights - Understanding the various types of mortgage loans is essential for potential homeowners to secure favorable terms and conditions, including lower interest rates and down payment options Types of Mortgage Loans - Conventional Loans: The most common type, divided into conforming and non-conforming loans [2] - Conforming Loans: These loans meet the specifications set by Fannie Mae or Freddie Mac, requiring a minimum credit score of 620 and a down payment of at least 3% [3][4] - Non-Conforming Loans: These do not meet the requirements of Fannie Mae or Freddie Mac and may have more flexible terms [5][6] - Jumbo Loans: For higher-priced homes, starting above $806,500 in most areas, requiring higher credit scores and down payments [7][8] - FHA Loans: Government-backed loans designed for low-to-moderate-income borrowers, requiring a minimum down payment of 3.5% with a credit score of 580 [9][10] - VA Loans: Available for military service members and veterans, typically requiring no down payment and a minimum credit score of 620 [12] - USDA Loans: For low-income borrowers in rural areas, requiring no down payment and a minimum credit score of 640 [13][14] - Fixed-Rate Mortgages: Offer a consistent interest rate throughout the loan term, with options for 15 or 30 years [15][16] - Adjustable-Rate Mortgages (ARMs): Feature a fixed interest rate for an initial period, after which the rate adjusts periodically [17] - Second Mortgages: Include home equity loans and HELOCs, allowing homeowners to borrow against their equity [18][20][22] - Assumable Mortgages: Allow buyers to take over a seller's existing mortgage, potentially securing better terms [24][25][26] - Reverse Mortgages: Designed for seniors, allowing them to receive payments from their home equity [27][28][29] - Non-Qualified Mortgages: Offer more flexible qualifying criteria, suitable for freelancers or those with non-traditional income [30][31][32] - ITIN Loans: Available for individuals using an Individual Tax Identification Number instead of a Social Security number [34] - Construction Loans: Used to finance the building of a home, transitioning to a traditional mortgage once construction is complete [35][36] - Home Renovation Loans: Financing options for home improvements, including FHA 203(k) loans [37][38] - Chattel Loans: For purchasing movable property, not including land [39][40] - Bridge Loans: Short-term loans to cover the gap between selling one home and buying another [41][42][43] - Piggyback Loans: A second mortgage to help with down payments, often structured as 80-10-10 [44] - Balloon Mortgages: Feature low initial payments with a large final payment due at the end of the term [45][46] - Physician Mortgage Loans: Tailored for medical professionals, often with relaxed qualifying criteria [47][48] - Investment Property Loans: Designed for properties intended for rental or flipping, requiring higher down payments [49][50] - Interest-Only Mortgages: Allow borrowers to pay only interest for a period, leading to higher payments later [51][52] Choosing a Mortgage Loan - Selecting the right mortgage type depends on individual financial goals, credit scores, and budget [53] - Refinancing options are available to switch to a different mortgage type later [54][55] - Common questions include the most common loan types, risks associated with certain loans, and the easiest loans to qualify for [56][57][60]