5 types of mortgage loans: A conventional mortgage is a home loan that’s not insured by the federal government.
Generally, lenders require you to pay private mortgage insurance on many conventional loans when you put down less than 20 percent of the home’s purchase price.
Jumbo loans are more common in higher-cost areas and generally require more in-depth documentation to qualify.
FHA loans: Backed by the FHA, these loans help make homeownership possible for borrowers who don’t have a large down payment saved up and don’t have pristine credit.
You must purchase a home in a USDA-eligible area and meet certain income limits to qualify.
Pros of government-insured loans They help you finance a home when you don’t qualify for a conventional loan.
You’ll have higher overall borrowing costs.
Fixed-rate mortgages keep the same interest rate over the life of your loan, which means your monthly mortgage payment always stay the same.
Cons of fixed-rate mortgages You’ll generally pay more interest with a longer-term, fixed-rate loan.
If you don’t plan to stay in your home beyond a few years, an ARM could save you big on interest payments.