The Different Types of Home Purchase Mortgages

Whether you are an experienced investor or a first-time home buyer, just starting your research on mortgages, there are a few home purchase mortgages that I am sure you have already heard of.

Most people are familiar with Conventional, FHA and VA loans, as they are the most common types of loans in the United States. And while you may have heard of Conforming and Jumbo loans, these types of loans are not as commonly known as the first three.

In this post, I will be explaining what exactly these five home purchase mortgages are, so that you can better understand your options when they are presented to you by a New Berlin mortgage professional, like myself.

A conventional mortgage is a type of loan that can be used to purchase a home but is not secured directly by the United State government. This type of loan is secured by private lenders, like banks, mortgage companies and in some cases government-sponsored enterprises. This is only the case when a conventional loan is also a conforming loan.

An FHA mortgage loan is a type of loan that is distributed only by lenders that have been federally qualified and is insured by the FHA (Federal Housing Association). This type of loan was designed for borrowers who may not have enough income to make a large down payment on the purchase of their home or may not have a good enough credit score to qualify for another type of loan.

A VA mortgage loan is a type of loan that was started by the United States Department of Veterans Affairs to assist military veterans and their families obtain financing for the purchase of their home. The VA dictates the terms and who can qualify for this type of loan.

A conforming mortgage is a type of loan that is equal to or less than conforming loan amount that has been set by Fannie Mae and Freddie Mac’s federal regulator. Any mortgages that exceed these limits are known as non-conforming loans, which would then be classified as jumbo loans.

A jumbo mortgage is a type of loan that’s financing amount exceeds the limits previously set by the Federal Housing Finance Agency. This type of loan was created for homes located in competitively priced areas or for extremely expensive homes.

Now that you know a little bit more about the basics of the five major home purchase loan types, it’s time to call me, your trusted New Berlin Mortgage broker, to get the ball rolling on the purchase of your dream home!

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