Learn more about mortgage loan types before you set up an appointment with a lender. Use the mortgage calculator to see how much you can afford.
We know how intimidating it can be to walk into a Richmond area bank and ask questions about the mortgage loan process. We want to help you feel more confident during that visit by providing you with information on mortgage loan types.
🤔 What is a home mortgage loan?
Home mortgage loans are secured by homebuyers who don’t have enough cash on hand to pay the full sale price for a house. Mortgage loans are secured through banks, credit unions, and other lenders. The loan amount and interest are repaid through monthly payments for a period determined by the terms of the loan.
🏦 Conventional Mortgage Loans
Conventional loans require a down payment that is a percentage of the property’s sale price. In order to qualify for this type of loan, you’ll need a credit score of at least 620 and have an approved debt-to-income ratio.
A mortgage loan that meets lending limits is known as a conforming mortgage. These loans are typically secured by those purchasing a single-family home, a vacation home, or an investment property.
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🏙️ Government Insured Loans
There are three government agencies that help those wanting to become a homeowner who may not qualify for a conventional mortgage loan type. You may get a loan insured through the U.S. Department of Veterans Affairs (VA Loan), Federal Housing Administration (FHA Loan), or the U.S. Department of Agriculture (USDA Loan).
FHA Loans are available for people who may not be able to make a large down payment or qualify for a conventional loan because of their credit history. Homeowners must pay two mortgage premiums with this type of mortgage loan.
💰 Fixed-Rate Mortgages
If knowing the amount of your mortgage payment each month is important, you’ll want to look into getting a fixed-rate mortgage loan. With this mortgage loan type, the interest rate stays the same for the life of the mortgage.
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💵 Adjustable-Rate Mortgages
Adjustable-rate mortgage loans offer a fixed rate that is lower for a period of time at the beginning of the mortgage but the interest rate resets to a variable interest that continues the remaining term of the mortgage. This type of mortgage loan comes with a monthly payment that can get larger over time, so you should understand the risks before choosing a loan with these terms.
🧮 Home Mortgage Calculator
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We are a locally owned Real Estate team right here in RVA, and we believe our motto says it all: ALL ABOUT THE EXPERIENCE!!! We strive to make our client’s need to sell or buy a home, or even their property management needs an overall great experience. Our business model is deeply founded in the fact that it is all about the experience!