Local: For low- to middle-income borrowers, first-time homebuyers, or public service employees.USDA: For low- to middle-income borrowers in rural areas.VA: For veterans, servicemembers, or surviving spouses.Available to those with lower credit scores.Typically cost less than FHA loans but can be harder to get.If multiple options fit your situation, try out scenarios and ask lenders to provide several quotes so you can see which type offers the best deal overall. Sometimes, only one loan type will fit your situation. How much you can borrow, and the house price range you can considerĮach loan type is designed for different situations.The total cost of your loan, including interest and mortgage insurance.How much you will need for a down payment.Mortgage loans are organized into categories based on the size of the loan and whether they are part of a government program. Loan type Conventional, FHA, or special programs Consult with multiple lenders and get a quote for an FHA loan as well. If you have a credit score in the mid-600s or below, you might be offered ARMs that contain risky features like higher rates, rates that adjust more frequently, pre-payment penalties, and loan balances that can increase. ARMs marketed to people with lower credit scores tend to be riskier for the borrower. Not all lenders follow the same rules, so ask questions to make sure you understand how these rules work. These rules control how your rate is calculated and how much your rate and payment can adjust. Understand the fine print.ĪRMs include specific rules that dictate how your mortgage works. If you’re considering a nonstandard structure, make sure to carefully read the rules and ask questions about when and how your rate and payment can adjust. Some ARMs may adjust more frequently, and there’s not a standard way that these types of loans are described. Learn more about how adjustable rates change. During the second period, your rate goes up and down regularly based on market changes. During the first period, your interest rate is fixed and won’t change. Understanding adjustable-rate mortgages (ARMs) Learn moreĮxplore rates for different interest rate types and see for yourself how the initial interest rate on an ARM compares to the rate on a fixed-rate mortgage. In the later years of an ARM, your interest rate changes based on the market, and your monthly principal and interest payment could go up a lot, even double. However, if you end up staying in your house longer than expected, you may end up paying a lot more. In this case, future rate adjustments may not affect you. You may want to consider this option if, for example, you plan to move again within the initial fixed period of an ARM. Your total monthly payment can still change-for example, if your property taxes, homeowner’s insurance, or mortgage insurance might go up or down.Īdjustable-rate mortgages (ARMs) offer less predictability but may be cheaper in the short term.

With a fixed-rate loan, your interest rate and monthly principal and interest payment will stay the same. Your monthly payments are more likely to be stable with a fixed-rate loan, so you might prefer this option if you value certainty about your loan costs over the long term.

Compare mortgage rates 30 year fixed