Types of Mortgages

Getting a mortgage can be overwhelming, but knowing the difference in the types of loans you could get makes it easier to make a decision. Here’s a simple guide to the most common types of mortgages:

  • Alternative Documentation
    -Loans that don’t coincide with regular qualified mortgage documentation. Options include, bank statement programs, investment property programs, and debt service programs. These can be more flexible compared to conventional loans and are generally not verified.
  • Commercial
    -Commercial loans are for income-producing property which are used for business purposes. Some examples of these would be retail malls, hotels, office buildings, and shopping centers. These are often made to business entities as opposed to individual borrowers and since the entity might not have a financial track record or credit rating, the lender may require the owners of the entity to guarantee the loan.
  • Conventional/Fixed-Rate
    -These are the most common loans and are safe because of their consistency. They are available in 10, 15, 20, 30, 40, and even 50-year timeframes. 15-year and 30-year are the most common. This type of loan requires at least 3% down payment. These loans can be used for a primary home, second home, or an investment property. A downside for some borrowers is that the minimum FICO score required is 620 or higher.
  • FHA
    -These mortgages are backed by the Federal Housing Administration. They come with built-in mortgage insurance to protect the possibility of not being able to pay the loan. Borrowers need a minimum FICO score of 580 to get the FHA’s maximum 3.5% financing, but a score of 500 is accepted if there is at least a 10% down payment.
  • Foreign National
    -This type of mortgage is offered to foreigners by private lenders. As foreigners generally lack credit data, it is harder to get a loan. As they are riskier for the lender, the borrowers are required to make much larger down payments, usually from 30-50%. They also carry higher interest rates.
  • VA
    -These loans are for active duty and veterans of the US military and their families. They are flexible and have low-interest rates. VA loans do not require a down payment or and are guaranteed by the Department of Veteran Affairs. The requirements may vary depending on the year of service and whether the discharge was honorable or dishonorable.

* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.

Pre-qualify for a loan in a few simple steps

Get Started

Fill out your Secure Application

Apply Now

See what our clients are saying:

Testimonials