When it comes to buying a home, the most popular loan option is the fixed-rate mortgage. About 90% of homebuyers choose this type of loan, which offers a consistent interest rate and monthly payment for the life of the loan. Fixed-rate mortgages are available in 15- and 30-year terms, and are ideal for those who plan to stay in their home for at least five to seven years. For those with a lower credit rating or minimal cash reserves for a down payment, FHA and USDA-backed loans may be a viable option.
VA-backed loans are often better than conventional loans for military service members, veterans, and eligible spouses. Jumbo mortgages are mortgage lending products that exceed the Federal Housing Finance Agency (FHFA) loan limits. These loans are more common in higher-cost areas, such as Los Angeles, San Francisco, New York City, and Hawaii, where home prices tend to be higher. If you're looking to finance a home with a sale price that exceeds the latest compliant loan limits, a jumbo loan is probably your best option. When it comes to financing your home, it's important to do your research and understand all of your options.
Taking the time to research the basics of home financing can save you a significant amount of time and money. Be sure to consider all of your options before making a decision.
