As you begin your home buying process, it is important to understand the various types of home loans before deciding what mortgage is best for you and your family.
Understanding the technicalities of mortgages and selecting the right type of loan can be a stressful decision. As a veteran owned mortgage broker located in Falcon, Colorado, the Reichert Mortgage Team is passionate about assisting families with home loans. Our goal is to educate the Colorado community on all factors of home buying, including the types of mortgages.
What is a Mortgage?
A mortgage is the type of loan used to finance the purchase of your home. The loan allows you to buy your home by borrowing the funds from a bank or mortgage lender by using your home as collateral. While there are many types of home loans, here are three types of mortgages to be mindful of when deciding what loan is perfect for your dream home.
Conventional Home Loan
A conventional loan, also known as a conforming loan, is the most common type of mortgage. This type of mortgage loan is not backed by the federal government, but must meet certain standards of the Federal Housing Finance Agency. A conventional home loan is a great option for buyers with good credit scores looking to make a sizable down payment.
FHA Home Loan
A FHA loan is a type of mortgage backed by the Federal Housing Administration. This loan is a great option for first time home buyers, borrowers who don’t have a large down payment saved up, or borrowers with lower credit scores. To be approved for a FHA home loan, you must meet certain criteria to qualify, such as having mortgage insurance, and there is a price cap on how much you can borrow.
Jumbo Home Loan
A jumbo loan is considered a non-conforming loan, which means this type of mortgage falls outside the limits set by the Federal Housing Finance Agency. Instead, each county is able to set their own limits on jumbo loans. Jumbo home loans are common in areas with expensive homes, and borrowers must have higher credit scores to qualify. As the limits on this type of loan vary by area, it is important to talk with a mortgage specialist who understands the area and the financial technicalities surrounding the real estate market.
Home Loan Programs | The Reichert Mortgage Team
Figuring out what type of mortgage loan is best is a difficult but crucial step in the home buying process. The Reichert Mortgage Team is here to help you with researching, preparing, and acquiring any loan for your new home, and we offer different types of home loans for families in Colorado Springs and surrounding areas. Our experienced team will work with you to find the best loan so you can find the perfect home. To learn more about the loan programs we offer, or if you would like to ask questions regarding a home loan, we are happy to discuss this further with you — contact us today!