Conventional Fixed Rate Mortgage
The conventional fixed rate mortgage has a constant interest rate and monthly payments that never change. This option allows you to lock in the rate for the life of your loan. If your loan amount exceeds 80% of the value of your home, you are required to obtain private mortgage insurance on the loan.
Conventional Adjustable Rate Mortgage
The conventional adjustable rate mortgage has an interest rate tied to a margin and index and the rate and monthly payment can change over the life of the loan. Some adjustable rate loans offer an initial fixed rate period, typically from 3-10 years. At the end of this fixed rate period, the interest rate then adjusts on an annual basis for the remaining term of the loan. If your loan amount exceeds 80% of the value of your home, you are required to obtain private mortgage insurance on the loan.
FHA loans are insured by the Federal Housing Administration, a division of the Department of Housing and Urban Development. These loans are available with either fixed or adjustable interest rates. FHA products may require as little as a 3.5% down payment and they typically offer more flexible underwriting criteria than conventional loans.
VA loans are special loans available only to active duty military and veterans. Eligible borrowers can finance up to 100% of the purchase price of a new home. VA loans are available only with fixed interest rates.