What is a Conventional Fixed-Rate Mortgage?

A conventional fixed-rate mortgage offers a consistent interest rate for the life of the loan, which means your monthly principal and interest payment stays the same (note; if escrowing for taxes and insurance, the total monthly mortgage payment may increase or decrease due to changes in taxes and insurance costs). Conventional loans can be a great option for borrowers with good credit and are available with a variety of down payment options.

Why consider it?

• Predictable principal and interest payment
• Multiple down payment options
• Available for primary homes, second homes and investment properties, subject to program requirements
• Mortgage insurance may not be necessary or be removable once certain requirements are met
• Available in different loan terms

What is an FHA Loan?

An FHA loan is a government-insured mortgage designed to make homeownership accessible to more borrowers (note; borrowers must pay the premiums related to mortgage insurance). FHA loans allow down payments as low as 3.5% for qualifying borrowers and generally offer more flexible credit and qualification guidelines than conventional financing.

Why consider it?

• Low down payment options
• More flexible credit guidelines
• Gift funds may be allowed for eligible expenses
• Seller contributions may be permitted within FHA guidelines
• Can be a good option for first-time buyers, although you do not have to be a first-time homebuyer

FHA loans require mortgage insurance.

What is an Adjustable-Rate Mortgage?

An ARM typically starts with an interest rate that is fixed for an initial period. After that period, the rate can adjust and may increase) at predetermined intervals based on the loan's index, margin and adjustment limits.

Why consider it?

• Initial rates may be lower than comparable fixed-rate options
• Can be useful for borrowers who don't expect to keep the home or loan long-term
• Different fixed introductory periods may be available
• Rate caps limit how much the interest rate can change

Because the rate may increase or decrease after the initial fixed period, it's important to understand how future adjustments could affect your payment.

What is a Section 184 Loan?

The HUD Section 184 Indian Home Loan Guarantee Program provides home financing specifically for eligible Native American and Alaska Native borrowers, tribes and certain tribal housing entities.

Why consider it?

• Low down payment requirements
• Flexible underwriting compared with some traditional mortgage programs
• No monthly mortgage insurance
• Available for eligible purchases, refinances and certain construction transactions
• Designed to expand homeownership opportunities within Native communities

Eligibility and property requirements apply.

What is a USDA Loan?

A USDA mortgage is a government-backed home loan designed to help eligible borrowers purchase homes in qualifying rural and suburban areas. One of its biggest advantages is the possibility of 100% financing with no down payment required for eligible borrowers.

Why consider it?

• No down payment for qualified borrowers
• Competitive financing options
• Available for eligible primary residences
• Can help make homeownership more affordable

USDA has household-income limits and property-location requirements, and guarantee fees apply.

What is a Jumbo Loan?

A jumbo mortgage is designed for loan amounts that exceed the conforming loan limits established for conventional loans. It can provide financing for higher-priced homes that require a larger mortgage.

Why consider it?

• Financing for higher loan amounts
• Useful for higher-priced properties
• Fixed-rate and adjustable-rate options may be available
• Various financing structures may be available depending on the investor

Jumbo loans typically have stronger credit, income, asset and reserve requirements than standard conforming loans.

A temporary buydown reduces the borrower's effective monthly mortgage payment during the first one or more years of the loan. Funds provided by an eligible party, such as a seller or builder, are placed into a buydown escrow account and used to supplement the borrower's monthly payments during the temporary buydown period.

For example, with a 2-1 buydown, monthly payments are calculated as though the interest rate were 2 percentage points lower during year one and 1 percentage point lower during year two. Beginning in year three, monthly payments are based on the full note rate for the remainder of the loan.

Why consider it?

• Lower initial monthly payments
• Can ease the transition into a new mortgage payment
• Seller or builder contributions may be used when permitted
• The underlying mortgage itself remains a fixed-rate loan when paired with a fixed-rate product

The borrower generally must qualify using the full note rate, subject to applicable program requirements.