5 Common Mortgages, Explained
When you’re buying a home, it’s important to understand the different types of mortgages available to you. Here we’ll break down five of the most common types of mortgage loans. Keep in mind that each type has its own benefits and drawbacks, so be sure to do your research before deciding on a mortgage.
5 Common Mortgages, Explained
The most common mortgage types include:
- Fixed-rate mortgages
- Adjustable-rate mortgages
- VA loans
- FHA loans
- USDA loans
Here’s a closer look at each.
Fixed-Rate Mortgages
Fixed-rate mortgages are the most popular type of home loan. As the name suggests, the interest rate on a fixed-rate mortgage is fixed for the life of the loan. That means your monthly payment will stay the same, even if interest rates rise over time.
One benefit of a fixed-rate mortgage is that you can predict your monthly payments for the life of the loan. That can make budgeting and long-term financial planning easier.
On the downside, fixed-rate mortgages typically have higher interest rates than other types of loans, so your monthly payments may be higher than with other types of loans. And if interest rates fall, you won’t be able to take advantage of it unless you refinance.
Adjustable-Rate Mortgages
Adjustable-rate mortgages (ARMs) have interest rates that adjust over time. The initial interest rate is usually lower than a fixed-rate mortgage, but it can go up or down as time goes on.
The benefit of an ARM is that you may be able to get a lower interest rate than you would with a fixed-rate mortgage. That can save you money on your monthly payments.
The downside is that your interest rate could go up over time, which means your monthly payments could go up as well. And if interest rates rise sharply, you could end up owing more than your home is worth.
Related: ARMs vs. fixed-rate loans
VA Loans
VA loans are available to eligible veterans and their spouses. They’re backed by the U.S. Department of Veterans Affairs and offer competitive interest rates and terms.
One benefit of a VA loan is that you may be able to get a lower interest rate than you would with a conventional loan. You also don’t have to worry about making a down payment, and there’s no private mortgage insurance (PMI) required.
On the downside, VA loans are only available to eligible veterans and their spouses, as well as a small number of other people.
Related: Can you buy a FSBO with a real estate agent?
FHA Loans
FHA loans are backed by the Federal Housing Administration and offer competitive interest rates and terms. They’re often used by first-time homebuyers because they require as little as 3.5% down.
One benefit of an FHA loan is that it’s easier to qualify for than a conventional loan. That’s because you can qualify with a lower credit score and down payment.
On the downside, FHA loans require mortgage insurance, which can add to your monthly payment. And if you stop making your payments, the FHA could foreclose on your home.
USDA Loans
USDA loans are available to eligible rural and suburban homeowners. They’re backed by the U.S. Department of Agriculture and offer competitive interest rates and terms.
One benefit of a USDA loan is that you may be able to get a lower interest rate than you would with a conventional loan. You also don’t have to worry about making a down payment, and there’s no PMI required.
On the downside, USDA loans are only available to eligible rural and suburban homeowners.
Choosing the right mortgage is an important decision, so be sure to do your research before deciding on a loan type.
Related: Why does a home appraisal matter so much?
938 E Jasper Dubois Road Jasper, Indiana
5 Beds 4 Baths 5,700 SqFt 6.100 Acres
Listing courtesy of Kevin Bayer from RE/MAX Local.
3289 St Charles Street Jasper, Indiana
4 Beds 4 Baths 3,906 SqFt 0.595 Acres
Listing courtesy of Annette Wigand from ERA FIRST ADVANTAGE REALTY, INC.
1928 S A St. Jasper, Indiana
3 Beds 4 Baths 3,376 SqFt 6.258 Acres
Listing courtesy of Larry Carpenter III from Carpenter Realty LLC.
1441 N Wheatland Drive Jasper, Indiana
4 Beds 3 Baths 3,009 SqFt 1.560 Acres
Listing courtesy of Judy Gosman from RE/MAX Local.
5070 W Alder Creek Drive Jasper, Indiana
4 Beds 3 Baths 4,208 SqFt 1.500 Acres
Listing courtesy of Stephanie Hasenour from RE/MAX Local.
4536 W 150 N Jasper, Indiana
4 Beds 4 Baths 2,986 SqFt 1.482 Acres
Listing courtesy of Stacey Thieman-Wright from THIEMAN REALTY.
1525 Grandview Drive Jasper, Indiana
3 Beds 3 Baths 4,132 SqFt 0.354 Acres
Listing courtesy of Stacey Thieman-Wright from THIEMAN REALTY.
3237 Dogwood Drive Jasper, Indiana
3 Beds 4 Baths 4,326 SqFt 0.675 Acres
Listing courtesy of Larry Carpenter III from Carpenter Realty LLC.
247 N Westlin Drive Jasper, Indiana
3 Beds 3 Baths 2,849 SqFt 0.999 Acres
Listing courtesy of Annette Wigand from ERA FIRST ADVANTAGE REALTY, INC.
836 W 20th Street Jasper, Indiana
3 Beds 3 Baths 4,376 SqFt 0.590 Acres
Listing courtesy of Elizabeth Mehringer from RE/MAX Local.
1245 W 6th Street Jasper, Indiana
4 Beds 3 Baths 3,610 SqFt 1.300 Acres
Listing courtesy of Steve Wigand from ERA FIRST ADVANTAGE REALTY, INC.
872 S Countryside Drive Jasper, Indiana
3 Beds 2 Baths 3,498 SqFt 2 Acres
Listing courtesy of Linda Schroering from CENTURY 21 SCHROERING REALTY.
3255 E State Road 164 Jasper, Indiana
4 Beds 3 Baths 2,944 SqFt 1.024 Acres
Listing courtesy of Zach Holt from Whitetail Properties Real Estate.
1911 S A St. Jasper, Indiana
3 Beds 2 Baths 1,468 SqFt 0.314 Acres
Listing courtesy of Larry Carpenter III from Carpenter Realty LLC.
1761 Sugar Pine Drive Jasper, Indiana
3 Beds 2 Baths 1,829 SqFt 0.346 Acres
Listing courtesy of Ryan Craig from RE/MAX Local.
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