What are the different types of loans for a house?
Buyers have several types of loans to choose from when they finance a home. The most common types of loans include conventional, FHA, VA and balloon loans which fall into the category of fixed rate or adjustable rate loans.TypesThe two categories of mortgages include adjustable rate and fixed rate loans. An ARM or adjustable rate mortgage will have a variable interest rate while fixed rate loans maintain the same interest rate for the term.Conventional LoansConventional loans are offered through private companies like Freddie Mac and Fannie Mae. Qualifying for these types of loans is more difficult and buyers are usually required to make at least a 20 percent down payment.FHA LoansFHA loans are insured by the Federal Housing Administration in order to make it easier for buyers to qualify for mortgages. FHA loans offer buyers low down payments (3 percent) and closing costs.VA Home LoansThe Department of Veterans Affairs guarantees loans for qualified retired and active soldiers.
