There are many mortgage loan options available and many details involved with each. Scroll down to read about some various types of Government insured and conventional/private loans.

To see how much you may qualify for and find out what types of home buyer programs may apply to you. Fill out our Mortgage Analysis Worksheet for a free mortagage credit analysis.

FHA LOANS

Why choose an FHA-insured loan?

There are lots of good reasons to choose an FHA-insured loan, especially if one or more of the following apply to you:
You're a first-time homebuyer.
You don't have a lot of money to put down on a house.
You want to keep your monthly payments as low as possible.
You're worried about your monthly payments going up.
You're worried about qualifying for a loan.
You don't have perfect credit.
If any of these things describe you, then an FHA-insured loan may be right for you. Why? FHA-insured loans offer many benefits and a level of security that you won't find in other loans including:

Low cost: FHA-insured loans have competitive interest rates because the federal government insures the loans for lenders.

Smaller downpayment: FHA-insured loans have a low 3.5% downpayment and the money can come from a family member, employer or charitable organization as a gift.

Easier qualification: Because FHA insures your mortgage, lenders may be more willing to give you loan terms that make it easier for you to qualify.

Less than perfect credit: You don't have to have perfect credit to get an FHA-insured mortgage. In fact, even if you have had credit problems, such as a bankruptcy, it's easier for you to qualify for an FHA-insured loan than a conventional loan.

More protection to keep your home: The FHA has been helping people since 1934. Should you encounter hard times after buying your home, the FHA has many options to keep you in your home and avoid foreclosure.

FHA insures loans for lenders against defaults - it does not lend money or set interest rates. For the best interest rate and terms on a mortgage, you should compare mortgages from several different lenders. An FHA-approved lender can help you start the loan application process.

You may use an FHA-insured mortgage to purchase or refinance a new or existing 1- to 4-unit home, a condominium or a manufactured or mobile home (provided it is on a permanent foundation).

CONVENTIONAL LOANS

A conventional loan is a lender agreement that's not guaranteed or insured by the federal government under the Veterans Administration (VA) or the Federal Housing Administration (FHA), or the Rural Housing Service (RHS) of the U.S. Department of Agriculture. A conventional loan can, however, follow the guidelines of government sponsored enterprises (GSE's) like Fannie Mae or Freddie Mac. Both Fannie Mae and Freddie Mac are stockholder-owned corporations and are not part of the federal government.

At one point in our history, conventional loans were the only mortgage loans available and they were all made by local lenders such as banks, savings and loans, and credit unions. They kept and serviced these loans in their own portfolio until they were either paid in full or foreclosed on.

In the late 1930's, a secondary market was created which allowed these local lenders to sell their loans, getting the full payment much more quickly. Then the organizations that purchased the loans owned the agreement and collected payments from the borrower. Today it is very common for lenders to sell their loans to the secondary market.

Conventional loans may be "conforming" and "non-conforming". Conforming loans follow the terms and conditions set by Fannie Mae and Freddie Mac. Nonconforming loans don't meet Fannie Mae or Freddie Mac qualifications, but are also considered conventional.

Another category of loans, jumbo loans, falls outside of Fannie Mae eligibility but is also considered conventional. A jumbo loan is a loan above the maximum loan amount established by Fannie or Freddie and they usually have a higher interest rate.

The 2009 conforming loan limits remain at the limits set in 2006, 2007 and 2008. These guidelines put the maximum price for a first mortgage at $417,000 for a single-family dwelling. If you live outside of the 48 contiguous United States (in Guam, the Virgin Islands, Hawaii, or Alaska), or the dwelling is for a two-family, three-family, or four-family configuration, you qualify for a larger loan limit.

Conventional loans can be fixed rate mortgage or adjustable rate mortgage with many multiple configurations such as balloon payments, Option ARMs, hybrid (combination of fixed and ARM) loans, and a wide range of payment periods.

VETERANS ADMINISTRATION (VA) LOANS

What is a VA loan? A Veterans Administration (VA) loan can be used to help American servicemen or women and/or their spouses secure financing for a mortgage purchase. You can check with the Veterans Administration (through its website or through other information exchanges) to find out whether you are eligible given your service history. Only service members who have received honorable discharges and who have served 90 days or more may qualify for VA loans.

Bear in mind that the Veterans Administration isn't actually giving money towards your house or property. It provides a kind of insurance to lenders that you will make good on your obligation. If you get a loan for $144,000 or less, the VA will back you up to the tune of about $36,000 (this number may vary depending on the terms of your contract and agreement with the lender). This is unlike a conventional loan which the government does not insure.

If you take out a mortgage for more than $144,000, the VA will back you up with $60,000 worth of funds if you default. Bear in mind this money won't go to your pockets -- it will go to the lender to whom you defaulted.

The advantages of VA loans are manifold. First, you can purchase relatively large properties without a down payment or with a minimum down payment. 100 percent financing is possible, although experts caution that former service members should work out long-term payment strategies (including researching pensions and other benefits) before taking on a significant interest-only loan.

A VA loan should be used as a leverage to reduce your rates and qualify for a larger house than you might otherwise get through conventional methods. It should not be used as a tool to spend beyond your means.

VA loan qualifiers don't have to pay for private mortgage insurance, which can free up some funds for relieving consumer debt. If you come into funding early, you can prepay your VA loan without penalties. Finally, your seller can take care of closing costs for you, further reducing your upfront debt load.

On the flip side, VA loans sometime take longer to process. Moreover, sellers may not be thrilled by the prospect of paying closing costs. Still, if you're a service member who qualifies, it might be in your best interests to compare VA loan rates with conventional and FHA loan program rates.

FINANCIAL ASSISTANCE

Go to the Assistance section of our website to find out about grants, bonds and loan programs that get you into your next home with little to no money out of pocket.