So, you are ready to buy your first home? If yes, you might be interested to know more about mortgages. The lenders are ready to offer you a variety of mortgage loans with a variable rate of interest. You can pick the most suitable one to proceed ahead with your dream home purchase.

The independent mortgage advisor Essex can guide you better on different types of mortgage loans available in the market. They can make your new home buying experience more memorable with convenient financing options. However, if you are first interested in gathering some background knowledge about the types of mortgage loans available with lenders, spare some time to go through the article below. Here we are going to talk about the most popularly used mortgage loan options to help you make a confident decision about home buying.

Conventional Loan

These loans are not supported by the federal government; however, you can find them in two different packages: non-conforming and conforming. The first kind of conventional loan does not meet Federal Housing Financing Agency (FHFA) regulations. They are more suitable for larger homes and are usually available for borrowers with a great credit score. On the other side, conforming loans follow specific standards decided by FHFA, and they focus on several factors such as debt, credit, and size of the loan.

Jumbo Plan

Jumbo mortgages are the ones that fall outside the set limits of FHFA. They are a common solution for buyers living in expensive cities such as San Francisco, Los Angeles, and New York City. As lending more money brings more risk to lenders, these schemes require proper documentation to qualify. These loans are available with more competitive interest rates in comparison to conventional loans. However, they require borrowers to maintain a FICO score of more than 700.

Government Insured Loans

Although the government doesn’t lend mortgages directly to the borrowers, it plays a major role in the process. The government agencies keep on launching some worthy mortgage schemes from time to time to help buyers get loans for their new homes. When you are not able to qualify for conventional and jumbo loans, these government-approved loan schemes can help you better. The credit requirements over these mortgages are a little bit relaxed, but you may have to spend more time on documentation.

Fixed-Rate Mortgage

Fixed-rate mortgages can help you get loans with the same interest rate throughout the loan lifetime. It clearly means that your monthly mortgage payment will stay the same. These mortgage options are generally available with a preferred tenure of 15 or 30 years. They can help borrowers to plan their budget with a clear mindset as they have to deal with fixed-rate payments per month. However, the borrowers may end up paying higher interest than loans with adjustable interest rates.

You can choose any of these available loan options to proceed ahead with your home buying decision. However, it is better to consult an Essex mortgage advisor to make a thoughtful move.