So, you have decided to sell your home and upgrade, or you are just looking to buy your first home…unless you have the cash to DIY, this article will help you gain some understanding of mortgage options.

Financing options are going to differ from case to case, but here are the basics.  Going into a mortgage will require the knowledge and expertise of someone qualified to do mortgages.  We are more of a friend (not a lending institution). If you feel lost and need some help understanding how mortgages work when buying a house, we have some friends who know this stuff better than we do as realtors. So, don’t panic. Our friends are your friends too!

Below are 5 different types of mortgage options that commonly pertain to buying real estate.


The interest rate applied on the outstanding balance varies throughout the life of the loan on a Adjustable Rate Mortgage, or ARM.  An ARM can be a good financial choice for someone who can pay off the entire loan before the point of rate adjustment.  Someone who can refinance the new balance before the balloon payment, or someone who will not be financially injured by the rate adjustment.  These are things to discuss with your loan professional.  


Fixed-rate mortgages are common and are usually offered in 15-year and 30-year terms, and the interest rate over the life of the loan doesn’t change.  This means that your principal and interest payments stay the same for the life of the loan. 


FHA, VA, and USDA options are made available through the U.S. government. 

FHA Loans

first-time home buyers who may not have enough saved for a large down payment can benefit from this loan program.  In some cases, you can still qualify for an FHA backed mortgage with a bankruptcy or foreclosure. Discuss this with your loan professional.

USDA Loans

USDA loans are designed for low-income Americans who may not qualify for traditional mortgages. Some USDA loans don’t even require a down payment.  To be USDA eligible, the borrower must meet certain income requirements and the home must be within an approved area.    

VA loans

VA loans are only available to our  military personnel and provide the benefit of buying a home with zero down and no mortgage insurance.


The Federal government does not guarantee conventional mortgages so expect to purchase private mortgage insurance when you put down less than 20%.  To qualify for a conventional mortgage you will need strong credit, stable income and employment.


If you are looking to upgrade to a higher priced home beyond the standard of a typical home loan, and can qualify, a jumbo mortgage is what you will need.  Jumbo loans aren’t for everyone (certainly not the average home buyer).  But, this goes to show that there is a loan program for every buyer who wants to invest in real estate!