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]