Conventional Loans - The only security guarantee is the value
of the property.
Conforming LoansConventional
loans that follow the terms and conditions established by the guidelines of
Fannie Mae and Freddie Mac.

Fixed-Rate MortgageThe interest
rate and the principal payments remain fixed throughout the loan. Keep in mind
your monthly escrow account payment could vary from year-to-year as taxes and
insurance rates change.
Variable or Adjustable-Rate
MortgageThe interest rate on the loan fluctuates over the
period of the loan. Periodic adjustments to the interest rate are made based on
changes to a defined index. The loan's interest rate is determined by adding a
fixed number of points to the defined index.
Balloon LoanShort term,
fixed-rate mortgage that has monthly payments usually based on a 30-year
amortization schedule and a lump sum payment due at the end of term, usually 3,
5 or 7 years. The interest rate on balloon loans is usually less than a 15- or
30-year fixed-rate mortgage.
Piggyback LoanA second mortgage
that closes with the first. Often the first mortgage is for 80% of the purchase
price and the "piggyback" is for 10%. The home buyer covers the remaining 10%
with their down payment. (Some lenders will write a second mortgage of 15% or
even 20% of the purchase price.)
Housing Finance AgenciesThese
agencies offer special loan programs to low- and moderate-income buyers, buyers
interested in rehabilitating a home in a targeted area, and other groups as
defined by the agency. Working through a housing finance agency, you can receive
a below market interest rate, down payment assistance and other
incentives.
Jumbo and Non-Conforming
LoansLoans above the maximum amount established by the
guidelines of Fannie Mae and Freddie Mac. Often the interest rate charged for a
jumbo or non-conforming loan is higher than that of a conforming
loan.

B/C LoansLoans for borrowers who
cannot meet the credit guidelines established by Fannie Mae and Freddie Mac. The
purpose is to offer temporary financing to someone whose credit history
disqualifies them for a conforming loan (including someone who has recently
filed for bankruptcy, foreclosure or late payment on their credit report).
Typically the interest rates run higher and vary depending upon the individual
credit situation.
Government
FHA LoansThe Federal Housing Authority
(FHA), which is part of the U.S. Department of Housing and Urban Development
(HUD), plays a significant role in helping low- to moderate-income families
qualify for mortgages. FHA assists first-time buyers and others who would not
qualify for a conventional loan, by providing mortgage insurance to private
lenders. Interest rates for an FHA loan are usually the going market rate, while
the down payment requirements for an FHA loan are lower than conventional loans.
The required down payment can be as low as 3 percent and the closing costs can
be included in the mortgage amount.
VA LoansVA Loans are guaranteed
by the U.S. Department of Veterans Affairs. Service persons and veterans can
qualify for a VA Loan, which usually offers a competitive fixed interest rate,
no down payment and limited closing costs. While the VA does not issue the
loans, it does issue a certificate of eligibility required to apply for a VA
loan.
RHS Loan ProgramsThe Rural
Housing Service (RHS), which is part of the U.S. Department of Agriculture,
guarantees loans from private lenders to help low- to moderate income families
qualify for mortgages.