🏦 Mortgage Loan Types with Mortgage Calculator

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.

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 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.

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.

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.

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.