What Types of Mortgage Loan Programs Are Available Today?

There are six main categories of mortgage loan programs available today, and we offer them all:

1. Conforming
2. Conforming High-Balance
3. Jumbo
4. FHA
5. VA
6. USDA

All of these programs are described below.

A few years ago, there were many choices to consider. All of that has changed. Nowadays, most borrowers shun adjustable rate mortgage loans and instead seek 30 year fixed rate loans, or possibly 15 year loans if they can afford the higher payments.

So, what type of 30 year (or 15 year) fixed rate loan do you need? The answer depends on the size of the loan you need and the loan program category best suited to your financial profile.

Depending on your situation, you might still prefer an adjustable, such as one fixed for the first five years. You can expect a significantly lower rate if you accept the risk of a rate adjustment after the fixed initial period.

Or, you might consider a "buydown," in which your fixed rate is temporarily reduced during the first one or two years. Sometimes a home seller will offer to pay your lender for a buydown as an inducement to purchase their home.

The following table provides a brief overview of each of the six categories of loan programs, with details provided for each program below the table.

Conventional Loans	Government-Insured Loans
Conforming Loans Lowest rates Stringent qualification standards Private mortgage insurance required if loan exceeds 80% of property value	FHA Loans Rates slightly higher than conforming Less stringent qualification standards Lower minimum down payment (3.5%) Details
Conforming High-Balance Loans Same features as Conforming, except rates are slightly higher Accommodates loan amounts between $417,000 and $729,750 Details	VA Loans For veterans only Rates slightly higher than conforming Zero down payment required. Details
Jumbo Mortgage Loans Higher rates Most stringent qualification standards Accommodates loan amounts over $729,750 Details	USDA Mortgage Loans For rural and semi-rural properties No down payment required Income cannot exceed 115% of county median Details

As you can see from the above brief descriptions, selecting the right program is less about what style of rate and payments you want and more about which program fits your profile, including your financial situation and property value or desired purchase price.

Related Information

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