Mortgage: Here are the different types of mortgages you can get in the United States


Many Americans are trying to buy a home in a very volatile market, so there are options when choosing a mortgage.

There are fixed rate, conventional, and standard variable rate mortgages.

Whether you’re a first-time homebuyer or on a low income, there are options to meet your specific needs.

Some people may also benefit from government programs.

The fixed rate mortgage explained

A fixed rate mortgage will give you the same payment each month for the duration of the mortgage.

The interest applied to the loan is fixed and cannot be changed.

Although you may make higher payments today, the value of money changes and those payments may be considered lower twenty years from now.

A mortgage’s interest rate will also increase in the future to offset this cost to banks, while yours will remain the same.

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The conventional mortgage explained

A conventional mortgage is most often a 30-year fixed rate mortgage.

Just because they have a fixed rate doesn’t mean it’s conventional.

People with high credit and low debt to income ratio can get special mortgages that others can’t get.

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They can be obtained through Fannie Mae and Freddie Mac.

A lower amount of money is needed at the start and people can put as little as 3% on a house.

Interest may be higher, but borrowing costs are lower.

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The variable rate mortgage explained

This type of loan is directly linked to the national interest rate.

If the national interest rate increases, the cost of your payment also increases.

Often the payments will be fixed rate for the beginning, then change to an adjustable rate around the 7th year.

Rates may change every six months when the fixed rate ends and the adjustable rate begins.

Government assistance

There are government programs that offer help to first-time home buyers, veterans, and even low-income families.

There are programs through the FHA, USDA, and VA.

FHA loans require you to have a credit score of at least 580 and to make 3.5% of the payment.

The USDA has similar loans for rural areas and low-income families.

The VA offers loans to veterinarians for their service in the military.


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