Types of mortgage loans

There are many different kinds of mortgage loans that can allow a homebuyer to buy their first home or move up to a larger home. With the competition for your mortgage loan at an all time high, there are many new loan products that are created by lenders to fit the many different homebuyers that they deal with.

Here are a few basic types of mortgages that most mortgage lenders offer.

A conventional mortgage is also the most traditional form of mortgage and is often the starting point for first time homebuyers. These loans fall into the price range under $275,000 and are not insured by the government. A loan over the $275,000 range is referred to as a jumbo loan. These loans are funded by private mortgage lenders and investors and are not insured by the government.

An FHA loan refers to loans specifically designed for first time homebuyers that may not have large incomes. These types of loans are backed by the Federal Housing Administration (FHA) which is a division of the U.S. Department of Housing and Urban Development (HUD). These loans feature less stringent standards and levels of income and are widely used as they offer a 15 and 30 year terms. The total loan amount varies by city, but can be as large as $275,000.

The VA in a VA loan stands for the Veterans Administration who assists those who have served in the military. This type of loan is insured by the VA as long as you have qualified military service. There are features of the program such as low or no down payments and also offer 15-and 30-year fixed rate loans and one year adjustable rate mortgages (ARMs.)

A no-document mortgage helps people that are self employed still obtain a mortgage. It can also be used by individuals that do not wish to verify their income or people that have little or no credit history. There is a shorter application process and a limited approval process as the lender will not need to verify as much information. They do carry slightly higher interest rates and are not as readily available as other types of mortgages.